SEC Obtains Final Judgment Against Virginia Investment Adviser Charged with Fraud
Litigation Release No. 24517 / June 27, 2019
Securities and Exchange Commission v. Amrit J. S. Chahal, No. 1:18-cv-00426 (E.D. Va., filed Apr. 12, 2018)
On June 21, 2019, the U.S. District Court for the Eastern District of Virginia entered a final judgment against Fairfax, Virginia resident Amrit J. S. Chahal, who was charged last year by the SEC with perpetrating a fraudulent investment scheme.
The SEC's complaint, filed on April 12, 2018, alleged that Chahal used his company, Kane Capital Investment Group, LLC, to fraudulently solicit approximately $1.4 million from about 50 individuals, including friends and family members. The complaint further alleged that Chahal initially invested client funds in a variety of investments, but suffered significant trading losses. According to the complaint, instead of disclosing the losses, Chahal lied to his clients about their investment returns, continued raising funds, then used the money for his personal benefit, including to pay for his luxury car, rent, travel, dining, and other living expenses, and to make Ponzi-like payments to earlier investors.
Chahal was also charged criminally by the U.S. Attorney's Office for the Eastern District of Virginia and civilly by the Commodities Futures Trading Commission. In the criminal case, Chahal pleaded guilty to charges of orchestrating a multi-year investment fraud scheme, and was sentenced to a prison term of 30 months followed by three years of supervised release, and ordered to pay forfeiture of $1,232,510 and restitution of $445,633. Chahal also settled the charges brought against him by the CFTC, consenting to permanent injunctions and restitution of $1,232,510, which was deemed satisfied by the forfeiture order against him in the criminal case.
The final judgment entered against Chahal in the SEC's case permanently enjoins him from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, Section 17(a) of the Securities Act of 1933, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, and orders him to pay disgorgement of $1,232,510. His payment obligation is deemed satisfied by the forfeiture order against him in the criminal case. On June 25, 2019, the Commission also barred Chahal from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.
The SEC appreciates the assistance of the U.S. Attorney's Office for the Eastern District of Virginia, the Federal Bureau of Investigation, the Commodities Futures Trading Commission, and the Virginia State Corporation Commission.