U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23697 / December 1, 2016
Securities and Exchange Commission v. Onix Capital LLC and Alberto Chang-Rajii, et al., Civil Action No. 16-cv-24678 (S.D.FL, Filed November 8, 2016)
SEC Charges Asset Management Fund and Manager
The Securities and Exchange Commission today announced fraud charges and an asset freeze against Miami Beach-based asset management company Onix Capital LLC and owner Alberto Chang-Rajii, a Chilean national who fled the U.S. earlier this year.
The SEC alleges that Chang and Onix Capital defrauded investors in promissory notes that "guaranteed" annual returns of 12 percent to 19 percent and bilked others who were told their funds would be invested in promising start-ups. Chang and Onix Capital also are alleged to have falsely depicted Chang as an award-winning multi-millionaire "angel" investor with an M.B.A. from Stanford University.
According to the SEC's complaint unsealed Wednesday in U.S. District Court for the Southern District of Florida, Chang and Onix Capital sold more than $5.7 million in Onix promissory notes that they falsely claimed were guaranteed by Chang, and raised more than $1.7 million that Chang promised to invest in companies such as Uber, Snapchat, and Square. Instead, the SEC's complaint alleges that investor funds were diverted to Chang and used to pay other investors.
The SEC's complaint alleges the scheme began to unravel in March when reports published in the U.S. and Chile exposed the misrepresentations by Chang and Onix Capital. Chang fled to Malta and transferred approximately $4 million, including Onix Capital investor funds, to banks in Malta, the United Kingdom, Switzerland, and Australia.
The SEC's complaint charges Chang and Onix Capital with fraud and seeks return of allegedly ill-gotten gains, prejudgment interest, and financial penalties, among other relief for investors. The Honorable Judge Marcia G. Cooke granted the SEC's request for a temporary asset freeze against Onix Capital, Chang, and various relief defendants, and a hearing will be set by the court.
The SEC's complaint alleges that Chang and Onix Capital violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 206(4) of the Investment Advisers Act of 1940 and Rule 206-4-8(a) thereunder.
The SEC's investigation was conducted by Sean M. O'Neill, Eric E. Morales, and Paul Hopker in the Miami Regional Office and supervised by Jason R. Berkowitz. The SEC's litigation is being led by Mr. Morales and Andrew O. Schiff.