Source: Securities and Exchange Commission
Litigation Release No. 25432 / June 29, 2022
Securities and Exchange Commission v. Shlomo Nir and Tzachi Rahamim, No. 2:22-cv-04438 (C.D. Cal. filed June 29, 2022)
The Securities and Exchange Commission today charged two Israeli citizens with defrauding investors in a scheme that involved posing as a nationally-recognized financial educator to induce investors in Latinx and Spanish-speaking communities to sell securities and use the proceeds to purchase fixed indexed annuities from them.
The victim is not identified in the SEC’s complaint. The defendants, Shlomo Nir and Tzachi Rahamim, agreed to settle the charges.
The SEC’s complaint alleges that, between 2019 and 2021, Nir and Rahamim, both web developers, acted without the financial educator’s consent to alter the financial educator’s existing website, and later to create a new website that used the victim’s name, trademark, and other identifying information to give the impression to investors that the victim endorsed selling securities to buy the fixed annuities promoted.
According to the complaint, Nir and Rahamim earned almost $1.9 million in insurance broker commissions from their sales of annuities, including approximately $1 million from investors who sold securities they owned and then used the proceeds to purchase annuities. Nir and Rahamim each also received annual salaries of $240,000.
The SEC’s complaint, filed in the U.S. District Court for the Central District of California, charges the defendants with violating anti-fraud provisions of the Securities Act and the Securities Exchange Act. Without admitting or denying the allegations in the complaint, Nir and Rahamim each agreed to permanent injunctions and to pay disgorgement and penalties totaling more than $450,000.
The Office of Investor Education and Advocacy and Division of Enforcement’s Retail Strategy Task Force have issued Investor Alerts about fraudulent scams related to Community-Based Financial Frauds. Additional information is available on Investor.gov.
The investigation was conducted by Manuel Vazquez and supervised by Robert Conrrad.