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Litigation Release No. 23300 / July 7, 2015

Securities and Exchange Commission v. Neal Goyal, Civil Action No. 14-cr-00301 (N.D. Ill.) (MFK)

Neal Goyal Sentenced to Six Years in Prison and Ordered to Pay More Than $9.2 Million in Restitution for Wire Fraud

The Securities and Exchange Commission announced that on July 3, 2015, U.S. District Court Judge Matthew F. Kennelly sentenced former Chicago, Illinois investment fund manager, Neal Goyal, to six years in federal prison for operating a Ponzi-type scheme since 2006. In addition, Judge Kennelly ordered Goyal to pay more than $9.2 million in restitution to the victims of his fraud.

On May 29, 2014, in an action that paralleled the Commission's securities fraud case against Goyal, the U.S. Attorney's Office of the Northern District of Illinois filed a criminal information against Goyal based on a scheme in which he fraudulently obtained more than $11.3 million from more than 40 investors who invested in private funds under his control.

Among other things, the criminal information alleged that Goyal misused the stolen funds to support his lavish lifestyle, to pay business expenses and to open and support two baby clothing boutiques. Goyal also used funds from new investors to make Ponzi-type payments to other investors. Goyal concealed his fraud from investors by creating and distributing phony account statements. On February 6, 2015, Goyal entered a guilty plea to one count of wire fraud.

The Commission's case against Goyal is based on the same events. The SEC's complaint, filed on May 28, 2014, alleged that Goyal along with Caldera Advisors and Blue Horizon Asset Management violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8(a).

On May 28, 2014, the Court entered an order, pursuant to Goyal's consent, permanently enjoining him from further violations of the antifraud provisions of the federal securities laws, freezing his assets along with the assets of Caldera Advisors, LLC and Blue Horizon Asset Management, LLC, and ordering him to pay disgorgement and civil penalties in amounts to be determined in a separate hearing. On June 6, 2014, the Honorable Rebecca R. Pallmeyer appointed Kevin B. Duff of Rachlis, Duff, Adler, Peel & Kaplan, LLC as the receiver over Goyal, Caldera Advisors, LLC and Blue Horizon Asset Management, LLC (as defendants) and Caldera Investment Group, Inc. (as a relief defendant). On July 31, 2014, the Commission entered an order barring Goyal from the securities industry.

For further information, see Litigation Release No. 23008 (May 29, 2014).



Modified: 07/07/2015