The SEC fines $100,000 for Khalid Parekh for illegally investing $100k in customer funds.
Parekh targeted Muslim clients in the US, accumulating funds from 373 investors across 40 states.
He misallocated funds to undisclosed crypto-lending platforms without the clients’ consent.
The US Securities and Exchange Commission (SEC) imposed a fine of $100,000 for the Texas-based investment adviser Fair Invest and its managing member, Khalid Parekh. The regulators claimed that the money manager illegally invested $18.5 million of its Muslim clients’ funds in crypto without their consent. Between August 2021 and August 2022, Parekh accumulated funds from 373 investors across 40 states.
Notably, the SEC pointed out that Parekh targeted members of the Muslim community in the US through radio shows, podcasts, interviews, and other media. He convinced them that his investment strategies were Islamic law compliant and promised a 4% annual return.
The SEC revealed after a probe that Parekh misallocated funds to two undisclosed crypto-lending platforms instead of investing in conventional assets like equities, mutual funds, commodities, and exchange-traded funds as promised to investors. Catherine E. Floyd and Melvin E. Warren of the Fort Worth Regional Office, under the supervision of Timothy S. McCole and B. David Fraser, carried out the investigation. This misconduct led to settled charges against Parekh and Fair Invest as the SEC cited,
Without admitting or denying the SEC’s findings, Fair Invest and Parekh consented to the entry of an order imposing a cease-and-desist order and a censure against each of them and ordering them to pay, jointly and severally, a civil money penalty of $100,000.
The SEC hasn’t specified the lending platforms in which Parekh invested his illicit earnings. Both Parekh and the agency declined to reveal further details on the matter. While Parekh agreed to settle the charges with the $100k fine, he also withdrew his registration with the SEC as an investment adviser. In addition, he reimbursed the invested funds to his clients, along with the promised 4% returns.
The post SEC Fines Texas Money Manager for Illicit Crypto Investments appeared first on CryptoTale.
