On August 9, 2021, the Securities and Exchange Commission charged Westchester County, New York-based investment advisor Evarist C. Amah with engaging in a years-long scheme to defraud fellow members of his religion, the Grail Movement.
The SEC's complaint alleges that, from April 2016 to July 2019, Amah raised approximately $700,000 from his advisory clients using materially false and misleading statements about his investment performance, telling them that he had generated modest returns on their investments when, in reality, he had already lost virtually all of their money. According to the complaint, Amah also fabricated at least two performance statements to perpetuate his fraudulent scheme and conceal his misconduct. Amah also allegedly violated the fiduciary duties he owed to his individual clients by favoring another client, a fund, over them, using the individual clients' assets to pay expenses owed by the fund.
The SEC's complaint, filed in federal district court in New York, charges Amah with violating the antifraud provisions of Sections 206(1), (2), and (4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder, Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, as well as with aiding and abetting his investment advisory firm's violation of Section 17(a)(2) of the Securities Act. The SEC is seeking civil penalties, disgorgement of ill-gotten gains, and permanent injunctions.
The investigation was conducted by Eric Berelovich and Timothy Work and supervised by George Bagnall and Jennifer Leete. The litigation will be led by Stephan Schlegelmilch.