U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23023 / June 16, 2014
Securities and Exchange Commission v. Scott Valente et al., 14 Civ. 3974 (VLB) (S.D.N.Y.)
Federal Court Orders Preliminary Injunction and Asset Freeze Against Scott Valente and the ELIV Group, LLC
Washington D.C., June 16, 2014 - The Securities and Exchange Commission announced that on June 16, 2014, Judge Vincent L. Briccetti of the United States District Court for the Southern District of New York, entered a preliminary injunction, on consent against Defendants Scott Valente and The ELIV Group, LLC, enjoining and restraining them pending final disposition of the Commission's action, from violating the anti-fraud provisions of the Securities and Exchange Act of 1934 and the Investment Advisers Act of 1940, from soliciting or accepting additional investor funds, and, further, ordering an asset freeze. The Court's preliminary injunction order continues the interim relief the Commission obtained on an emergency basis when it commenced its civil injunctive action against Defendants on June 3, 2014. In its action, the Commission continues to seek, among other things, a permanent injunction, disgorgement of ill-gotten gains plus pre-judgment interest and civil money penalties.
The Commission's Complaint alleges that Valente and ELIV Group have fraudulently raised more than $8.8 million from approximately 80 clients by falsely claiming they have achieved consistent and outsized positive returns, among other misrepresentations about the safety of the investments. The ELIV Group has in fact earned no positive results at all, instead sustaining consistent investment losses for the past three years. Meanwhile, Valente has been making substantial cash withdrawals of client funds and spending their money on his home improvements and mortgage payments as well as jewelry and a vacation condominium. Valente's unsuccessful trading strategies and misappropriations have severely diluted the amount of client funds on hand at ELIV Group.
The preliminary injunction enjoins Valente and ELIV Group from violating Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5(b) thereunder, as well as Sections 206(1) and (2) of the Investment Advisers Act of 1940 (Advisers Act).
For further information, please see Litigation Release No. 23012 (June 3, 2014).