In a complaint filed on May 24 and unsealed today in federal court in Dallas, the SEC charged the advisor, Ash Narayan, of Newport Coast, California, along with The Ticket Reserve Inc., CEO Richard M. Harmon, and chief operating officer John A. Kaptrosky. The SEC obtained a court order on May 24 to freeze the assets of the defendants and the court appointed a receiver over The Ticket Reserve. The SEC’s complaint alleges that Narayan transferred more than $33 million from clients’ accounts to The Ticket Reserve, typically without their knowledge or consent and often using forged or unauthorized signatures. According to the complaint, the Ticket Reserve became dependent on the fraudulent cash infusions from Narayan’s unsuspecting clients to stay in business and in exchange, Narayan received nearly $2 million in hidden compensation from the company, most of it directly traceable to funds stolen from his clients.

“We allege that Narayan exploited athletes and other clients who trusted him to manage their finances. He fraudulently funneled their savings into a money-losing business and his own pocket,” said Shamoil T. Shipchandler, Director of the SEC’s Fort Worth Regional Office. “The asset freeze stops the uncontrolled spending of investor assets within The Ticket Reserve until the case is resolved, preserving money that rightfully belongs to Narayan’s clients.”

The SEC’s investigation was conducted by Michael A. Umayam, Keith J. Hunter, and Carol J. Hahn, and the case was supervised by David L. Peavler, Jessica B. Magee, and Eric R. Werner in the SEC’s Fort Worth office. The SEC’s litigation will be led by Christopher A. Davis and Ms. Magee. See here for further information.