Securities and Exchange Commission
SEC Charges Georgia Businessman with Affinity Fraud Focused On Christian Investors
Litigation Release No. 24747 / February 26, 2020
Securities and Exchange Commission v. Dionne Van Zyl, Civil Action No. 1:20-cv-00863-WMR, (N.D. Ga. Filed February 25, 2020)
On February 25, the Securities and Exchange Commission charged Dionne Van Zyl, a Georgia-based investment adviser, with defrauding dozens of clients by taking undisclosed fees, commissions, and other compensation over a period of more than six years.
According to the SEC's complaint, from 2013 to 2019, Van Zyl used his position of trust as a senior Elder at a suburban Atlanta church, and held himself out to fellow church members as having a background in finance and private equity, to form investment advisory relationships with dozens of congregants. Van Zyl allegedly invested $23.5 million of his clients' funds into his own failing start-up companies and his related investment fund, and also used clients' funds for high-frequency forex trading, without disclosing to investors how he was using their funds or the associated investment risks. As alleged, Van Zyl also failed to fully disclose his compensation, telling clients only that he could take certain "advisory" and "consulting" fees. While his clients lost most of their investment funds as a result of his trading activities, Van Zyl collected nearly $3 million in undisclosed fees, commissions, and other compensation.
The SEC's complaint, filed in federal court in Georgia, charges Van Zyl with violating the antifraud provisions of Sections 206(1), 206(2), 206(4) and Rule 206(4)-8 of the Investment Advisers Act of 1940, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933, and seeks permanent injunctions, civil penalties, and disgorgement plus prejudgment interest against Van Zyl.
The SEC's litigation will be led by Shawn Murnahan of the Atlanta Regional Office.
The SEC's Office of Investor Education and Advocacy and the Retail Strategy Task Force encourage investors to review the Investor Alerts Avoiding Investment Fraud in Your Faith-Based Community and Have Something in Common with Someone Selling an Investment? It May Make You a Target for Fraud to protect themselves and their communities from investment fraud.