SEC Obtains Temporary Restraining Order to Halt Fraud Targeting Indian Americans, Raising Nearly $130 Million

SEC Obtains Temporary Restraining Order to Halt Fraud Targeting Indian Americans, Raising Nearly $130 Million

The SEC has obtained a temporary restraining order, asset freeze, and other emergency relief to halt an alleged fraud perpetrated by Nanban Ventures LLC and its three founders, Gopala Krishnan (aka GK), Manivannan Shanmugam, and Sakthivel Palani Gounder. The defendants are accused of raising nearly $130 million from more than 350 investors since April of 2021 for investments in venture capital funds managed by the Defendants. Additionally, they raised more than $39 million from 10 investors that invested directly into entities controlled by the founders. The Defendants are accused of paying investors at least $17.8 million in fake profits as part of a Ponzi scheme and misrepresenting Gkrishnan's expertise and success using his eponymous “GK Strategies” options trading method. The SEC alleges that the Defendants violated several antifraud provisions and seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties from all the Defendants. It also seeks an order prohibiting the Founders from serving as officers or directors of a public company. The SEC’s ongoing investigation is being conducted by multiple members of the Fort Worth Regional Office and the litigation is being conducted by Keefe Bernstein and Jason Reinsch.