SEC Obtains Court Order to Stop Investment Adviser's Alleged Ongoing Offering Fraud
Litigation Release No. 25165 / August 13, 2021
Securities and Exchange Commission v. Martin Adrian Ruiz et al., No. 21-cv-06622 (S.D.N.Y. filed August 6, 2021)
The Securities and Exchange Commission today announced the filing of an emergency action against Martin A. Ruiz of New York, New York, and two entities he controls, Carter Bain Wealth Management, LLC (Carter Bain) and RAM Fund, LP (RAM). Shortly after the filing of the complaint, the SEC obtained a temporary restraining order and asset freeze against Ruiz, Carter Bain, and RAM to stop an allegedly ongoing fraudulent securities offering through which Ruiz and his entities allegedly misappropriated millions of dollars from investors.
According to the SEC's complaint, filed in the United States District Court for the Southern District of New York on August 6, 2021, and unsealed on August 12, 2021, Ruiz induced at least 56 investors, many of whom are elderly clients of Ruiz's New Mexico-based investment adviser Carter Bain, to invest at least $10.6 million in RAM by falsely claiming that their funds would be used to acquire real estate and to make commercial loans. According to the complaint, however, Ruiz misappropriated the vast majority of the investors' funds to support his lavish lifestyle by, among other things, paying for his residences in Manhattan and Santa Fe, covering millions of dollars in credit cards bills, and making student loan payments. The complaint also alleges that Ruiz hid the fraud from investors by making Ponzi-like payments, and providing investors with false valuations concerning their RAM investments.
The complaint charges Ruiz, Carter Bain, and RAM with violating Section 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint also charges Ruiz and RAM with violating Section 17(a)(2) of the Securities Act. The complaint further charges Ruiz and Carter Bain with violating Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The SEC obtained emergency relief, including a temporary restraining order and asset freeze, against Ruiz, Carter Bain, and RAM on August 9, 2021. The SEC seeks additional remedies in the ongoing litigation, including permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties, against Ruiz, Carter Bain, RAM, and other entities Ruiz owns and controls.
The SEC's investigation was conducted by J. Lee Robinson, Kenneth Stalzer, and Donna B. Walker and supervised by Ian S. Karpel and Jason J. Burt. The litigation will be led by Stephen C. McKenna and Kenneth Stalzer, and supervised by Gregory A. Kasper.