The Securities and Exchange Commission (SEC) has taken filed a complaint in the United States District Court for the Northern District of California, against William K. Ichioka, a resident of New York, New York, for engaging in a fraudulent investment scheme. The complaint alleges that Ichioka targeted individual investors primarily in California and Oregon, raising $25 million by making false claims about his investing prowess and promising substantial returns. However, instead of using the funds for legitimate investments, Ichioka misappropriated the money for personal use, including gambling and self-enrichment.
Fabricated Success and Misleading Promises
According to the SEC’s complaint, Ichioka operated an unregistered investment fund called Ichioka Ventures between June 2019 and October 2021. During this period, he solicited investments by presenting himself as a highly successful investor capable of generating significant returns. He not only promised large anticipated profits but also guaranteed the safety of investors’ principal amounts. However, these claims turned out to be far from the truth.
The complaint alleges that Ichioka was unable to deliver on his promised returns. To sustain the illusion of success, he resorted to using funds from new investors to repay previous ones, thereby perpetuating the scheme. Additionally, Ichioka went as far as falsifying a bank statement and other documents to create an appearance of legitimacy. The complaint also reveals that Ichioka misused millions of dollars from investors for personal luxuries, such as luxury watches, cars, gambling, and even a penthouse apartment.
Legal Consequences and Parallel Actions
The SEC’s complaint charges Ichioka with violating the antifraud provisions of the federal securities laws. If proven, the allegations would be a violation of several securities laws. Specifically, Ichioka could potentially be found to have violated Section 17(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. § 77q(a); Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78j(b), 17 C.F.R. § 240.10b-5; and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 (“Advisers Act”), 15 U.S.C. §§ 80b-6(1) and 80b-6(2).
The SEC is seeking various remedies and penalties. The Commission seeks permanent injunctions to restrain and enjoin the Defendant, both directly and indirectly, from participating in the issuance, purchase, offer, or sale of any securities.
Additionally, the SEC aims to secure disgorgement of the ill-gotten gains acquired through Ichioka’s fraudulent activities. This includes the recovery of profits obtained through the investment scheme, along with prejudgment interest. The Commission also seeks the imposition of a civil monetary penalty as a further consequence of Ichioka’s actions.
Furthermore, the SEC intends to impose an officer and director bar on Ichioka. This measure would prevent him from serving as an officer or director of any company involved in the securities industry.
However, Ichioka has agreed to a partial final judgment, which is subject to court approval. The judgment includes permanent injunctions and conduct-based restrictions, as well as an officer and director bar. The court will determine disgorgement, prejudgment interest, and a civil penalty at a later stage.
In parallel to the SEC’s actions, the U.S. Attorney’s Office for the Northern District of California (USAO) and the Commodity Futures Trading Commission (CFTC) have also announced charges against Ichioka.
For more information or to speak to a securities attorney, call Mark Astarita at 212-509-6544, or visit New York Securities Lawyer at www.securitieslawyer.us.
Have a securities law question? Call New York Securities Lawyers at 212-509-6544.
