SEC Charges Dentist-Turned-Investment Adviser for Three Separate Frauds
Litigation Release No. 25115 / June 11, 2021
Securities and Exchange Commission v. Edgar M. Radjabli, et. al., No. 2:21-cv-01761-MBS (D.S.C. filed June 11, 2021)
The Securities and Exchange Commission charged Edgar M. Radjabli (Radjabli), of Boca Raton, Florida, and two entities he controlled, for engaging in three separate securities frauds of escalating size.
The SEC's complaint alleges that Radjabli, formerly a practicing dentist, and Apis Capital Management LLC (Apis Capital), an unregistered investment adviser firm Radjabli owned and controlled, conducted a fraudulent offering of Apis Tokens, a digital asset representing tokenized interests in Apis Capital's main investment fund. Radjabli and Apis Capital issued a June 2018 press release falsely claiming that the Apis Token offering had raised $1.7 million when, in fact, the offering had raised no money.
The complaint further alleges that Radjabli and Apis Capital manipulated the securities market for Veritone, Inc., a publicly-traded artificial intelligence company, by announcing in December 2018 an unsolicited cash tender offer to purchase Veritone for $200 million, when, in truth, Radjabli and Apis Capital lacked the financing, or any reasonable prospect of obtaining the financing, necessary to complete the deal. Radjabli allegedly generated $162,800 in illicit profits on the resulting increase in Veritone's stock price by trading Veritone securities on behalf of Apis Capital and an affiliated fund.
Finally, the complaint alleges that Radjabli raised nearly $20 million from more than 450 investors in an unregistered, fraudulent securities offering launched in August 2019, through My Loan Doctor LLC (Loan Doctor). Radjabli falsely represented that investor funds raised by Loan Doctor would be used to originate loans to healthcare professionals which then would be securitized and sold to large institutional investors. Instead, Radjabli invested the bulk of the investor funds in unsecured and uninsured loans to digital asset lending firms and loaned almost $1.8 million of investor proceeds to Apis Capital.
The SEC's complaint charges Radjabli, Apis Capital, and Loan Doctor with violations of the registration provisions of Sections 5(a) and (c) the Securities Act of 1933 and several antifraud provisions of the federal securities laws, including Section 17(a) of the Securities Act, Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-8 thereunder, and Section 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. The defendants have agreed to settle the charges against them, without admitting or denying the allegations in the complaint. The settlement, which is subject to court approval, would require Radjabli to pay a total of $600,000 in monetary relief, comprised of $162,800 in disgorgement, $17,870 in prejudgment interest, and $419,330 in civil penalties, for which he, Apis Capital, and Loan Doctor would be jointly and severally liable based on Apis Capital's and Loan Doctor's respective roles in the three frauds. The settlement would also permanently enjoin Radjabli, Apis Capital, and Loan Doctor from violating the charged provisions of the federal securities laws, impose a conduct-based injunction and penny stock bar on Radjabli, and bar Radjabli from the securities industry.
The SEC's investigation was conducted by Jonathan Austin, John Lucas, and Deborah A. Tarasevich. The investigation was supervised by Ms. Littman and Associate Director Jennifer Leete. The SEC appreciates the assistance of the Financial Industry Regulatory Authority and the Consumer Financial Protection Bureau.