SEC Charges Texas Investment Adviser and Three Individuals with Defrauding Advisory Clients and Retail Investors

Litigation Release No. 25089 / May 13, 2021

Securities and Exchange Commission v. Knight Nguyen Investments, Christopher Knight Lopez, Forrest Andrew Jones, and Jayson Lopez, No. 4:21-civ-01586 (S.D. Tex. filed May 13, 2021)

On May 13, 2021, the Securities and Exchange Commission charged Katy, Texas-based investment adviser Knight Nguyen Investments and three individuals with scheming to invest funds from advisory clients and retail investors in at least five fraudulent securities offerings.

The SEC alleges that Knight Nguyen majority owner Chris Lopez and representative Forrest Jones held out the firm as an established investment adviser with expertise in low-risk alternative investments. The SEC also alleges that Chris Lopez and Jones largely targeted older and unsophisticated investors seeking to preserve or grow their retirement savings, telling them that Knight Nguyen only invested in "proven" companies that met the firm's stated investment criteria.

According to the complaint, however, Chris Lopez had no experience as a securities professional before forming Knight Nguyen and the firm had little or no experience with alternative investments. In addition, the SEC alleges that investor funds were only placed in high-risk securities issued by companies that did not meet Knight Nguyen's investment criteria and were in fact owned or controlled by Chris Lopez and/or his brother Jayson Lopez. As alleged in the complaint, as a result of these and other misrepresentations, Knight Nguyen, Chris Lopez, and Jones raised at least $3.7 million from approximately 70 advisory clients and retail investors between March 2016 and September 2018. The SEC alleges that Jayson Lopez aided and abetted the fraud by misusing investor funds and helping fabricate false financial statements and other documents.

The SEC's investigation was conducted by Catherine Floyd and Carol Stumbaugh, and was supervised by Barbara Gunn and Eric Werner of the Fort Worth Regional Office. The litigation is being conducted by Keefe Bernstein and supervised by B. David Fraser. The SEC acknowledges the assistance of the Alabama Securities Commission, the U.K. Financial Conduct Authority, the Securities and Exchange Board of India, and the Quebec Autorité des Marchés Financiers.