PANews reported on August 12 that according to the SEC official website, the U.S. Securities and Exchange Commission (SEC) announced charges against Cynthia and Eddy Petion and their company NovaTech Ltd., accusing them of implementing a fraudulent scheme to raise more than $650 million in crypto assets from more than 200,000 investors worldwide. The SEC also accused Martin Zizi, Dapilinu Dunbar, James Corbett, Corrie Sampson, John Garofano and Marsha Hadley of promoting NovaTech to investors.
According to the SEC’s complaint, the Petions operated NovaTech as a multi-level marketing (MLM) and crypto asset investment scheme from 2019 to 2023. They attracted investors by claiming that NovaTech would invest their funds in crypto assets and the foreign exchange market. NovaTech used most of the investor funds to pay existing investors and pay commissions to promoters, and only used a small portion of the investor funds to trade. The Petions misappropriated millions of dollars of investor assets for themselves. When NovaTech eventually collapsed, most investors were unable to withdraw their investments, resulting in huge losses.
The SEC's lawsuit, filed in the U.S. District Court for the Southern District of Florida, charges the defendants with violating the antifraud provisions of the federal securities laws and alleges that they violated registration provisions. The lawsuit seeks permanent injunctive relief, disgorgement of ill-gotten gains, and civil penalties. Zizi neither admitted nor denied the allegations, but instead agreed to partially settle the SEC's charges by agreeing to pay a $100,000 civil penalty and permanently enjoining future violations of the terms of the charges, with other monetary compensation in an amount to be determined at a later date. The partial settlement is subject to court approval.