SEC Charges Attorney with Role in Investment Schemes
Litigation Release No. 24584 / September 3, 2019
Securities and Exchange Commission v. Jayat P. Kanetkar and Guaranteed Investigations, Inc, No. 1:19-cv-03915 (N.D. Ga. Filed Aug. 30, 2019)
On August 30, 2019, the Securities and Exchange Commission charged a North Brunswick, New Jersey attorney, who is also a former FBI agent, and his company with aiding and abetting fraudulent investment schemes previously charged by the Commission and which caused investor losses of $2.1 million.
The SEC's complaint alleges that, from 2013 through 2016, Jayat P. Kanetkar ("Kanetkar") and his company, Guaranteed Investigations, Inc. ("Guaranteed"), aided and abetted a prime bank scheme orchestrated by Peter Baker of Lawrenceville, Georgia, and Elizabeth Oharriz of Miami Shores, Florida, and a real estate investment scheme orchestrated by Russell Craig of Atlanta, Georgia. The complaint alleges that Kanetkar, who acted as the escrow agent for each transaction, aided and abetted these fraudulent schemes by acting in contravention of written escrow agreements and by accepting and disbursing investor funds when he knew, or was reckless in not knowing, that the transactions were fraudulent.
The complaint charges Kanetkar and Guaranteed with aiding and abetting primary violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Kanetkar and Guaranteed have agreed to settle the charges without admitting or denying the allegations in the complaint and have consented to the issuance of final judgments permanently enjoining them from future violations of the antifraud provisions charged in the complaint, ordering them to pay disgorgement of $14,135 and prejudgment interest of $2,711, and ordering Kanetkar to pay a civil penalty of $25,000. The settlements are subject to court approval. Kanetkar has also agreed to settle an administrative proceeding pursuant to Rule 102(e) of the Commission's Rules of Practice, barring him from appearing or practicing before the Commission as an attorney.
The SEC's investigation was conducted by Christina McGill and Matthew B. Reisig, with assistance from Melissa Armstrong and Richard G. Lill, and was supervised by Timothy England and Melissa Hodgman.
For more information regarding the dangers of prime bank schemes and tips on how to avoid them, see the "Investor Alert: 'Prime Bank' Investments Are Scams."