SEC Charges Multi-Level Marketing Company and Promoters with Fraudulent Scheme
The Securities and Exchange Commission (SEC) has announced charges against NovaTech Ltd., a multi-level marketing company, and its promoters for operating a fraudulent scheme that raised over $650 million in crypto assets from more than 200,000 investors worldwide.
Alleged Fraudulent Scheme
The SEC alleges that NovaTech, operated by Cynthia and Eddy Petion, promised investors safe and profitable investments in crypto assets and foreign exchange markets. However, the majority of funds were used to pay existing investors and promoters, with only a fraction used for trading. The Petions allegedly siphoned millions of dollars for personal gain, resulting in substantial losses for most investors when the scheme collapsed.
Charges and Penalties
The SEC charges NovaTech, the Petions, and promoters Martin Zizi, Dapilinu Dunbar, James Corbett, Corrie Sampson, John Garofano, and Marsha Hadley with violating federal securities laws. The complaint seeks permanent injunctive relief, disgorgement of ill-gotten gains, and civil penalties. Zizi has agreed to a partial settlement, including a $100,000 civil penalty and permanent injunction.
Investor Education and Protection
The SEC urges investors to be cautious of fraudulent digital asset and crypto investment schemes, highlighting warning signs such as unregistered investments, promises of guaranteed returns, and unlicensed sellers.
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