SEC charges Krish Kumar for defrauding investors

SEC Litigation Releases

Filed March 26th, 2026

Detected March 28th, 2026

Summary

The SEC filed settled charges against Oklahoma resident Krish Kumar for allegedly defrauding investors in two offerings, raising approximately $7.8 million and misappropriating nearly $7 million. Kumar consented to a judgment enjoining him from future violations and ordering monetary remedies to be determined by the court.

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What changed

The Securities and Exchange Commission (SEC) has filed settled charges against Krish Kumar, an Oklahoma resident, for allegedly defrauding investors in two offerings managed by his entities, Future Fractal Investments LLC and Arcane Resonance Fund, LLC. The complaint alleges that between January 2024 and February 2025, Kumar raised approximately $7.8 million and misappropriated nearly $7 million of these funds for personal use. Specific allegations include misrepresenting investment strategies, causing the loss of Future Fractal's assets through inconsistent trades, misleading an Arcane investor about fund performance, and using investor funds to cover unauthorized payments for losses sustained in another fund.

Kumar has consented to a judgment that includes permanent injunctions against future violations of federal securities laws, conduct-based injunctions, and an order for monetary remedies to be determined by the court. Compliance officers should note the specific violations cited, including Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8. While Kumar consented to the settlement, the court must approve the judgment, and monetary remedies are still to be determined.

What to do next

Review investment adviser representations for accuracy and consistency with marketed strategies.
Ensure all fund assets are managed in accordance with stated investment objectives and policies.
Verify compliance with all antifraud provisions under the Securities Act of 1933 and the Securities Exchange Act of 1934.

Penalties

Monetary remedies to be determined by the Court upon a future motion by the SEC.

Source document (simplified)

Krish Kumar

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26507 / March 27, 2026

Securities and Exchange Commission v. Krish Kumar, No. 26-cv-00184 (N.D. Okla. filed Mar. 26, 2026)

SEC Files Settled Action as to Oklahoma Resident for Allegedly Defrauding Investors in Two Offerings

On March 26, 2026, the Securities and Exchange Commission filed settled charges against Oklahoma resident Krish Kumar for allegedly making materially false and misleading representations to investors regarding two separate offerings.

According to the SEC’s complaint, from approximately January 2024 through February 2025, Kumar raised approximately $7.8 million through two investment funds that he established and solely managed, Future Fractal Investments LLC and Arcane Resonance Fund, LLC (collectively, “the Funds”), and, while acting as an investment adviser, misappropriated nearly $7 million of the Funds’ collective assets by transferring them to personal accounts he controlled. The complaint alleges that prior to transferring Future Fractal assets to his personal accounts, Kumar placed trades that were inconsistent with the investment strategy he marketed to Future Fractal investors, which ultimately resulted in the loss of virtually all Future Fractal’s assets. The complaint further alleges Kumar misrepresented Future Fractal’s performance to an Arcane investor and used at least $300,000 of the funds raised from Arcane investors to make unauthorized payments to a Future Fractal investor for losses sustained in Future Fractal.

The SEC’s complaint, filed in the U.S. District Court for the Northern District of Oklahoma, charges Kumar with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. Without admitting or denying the allegations in the complaint, Kumar consented to the entry of a judgment, subject to court approval, in which he agreed to permanent injunctions enjoining him from future violations of the charged provisions of federal securities law, conduct-based injunctions, and an order that monetary remedies will be determined by the Court upon a future motion by the SEC.

The SEC’s investigation was conducted by Kathleen Galloway and Carol Stumbaugh, under the supervision of Derek Kleinmann and Jaime Marinaro of the SEC’s Fort Worth Regional Office, and with the assistance of Robert Nesbitt and William Connolly in the SEC's Office of Investigative and Market Analytics. The litigation will be led by Patrick Disbennett under the supervision of Keefe Bernstein.