SEC charges two India-based operators with frauds

Alleges that Pankaj Srivastava and Nataraj Kavuri offered "guaranteed" daily profits solicited investments for their purported investment management company called Profits Paradise

The Securities and Exchange Commission (SEC) has announced charges against two India-based operators of an alleged high-yield investment scheme seeking to exploit investors through pervasive social media pitches on Facebook, YouTube and Twitter.

The US capital markets regulator's Enforcement Division alleges that Pankaj Srivastava and Nataraj Kavuri offered "guaranteed" daily profits as they anonymously solicited investments for their purported investment management company called Profits Paradise. They invited investors to deposit funds that supposedly would be pooled with money from other investors and traded on foreign exchanges as well as in stocks and commodities. They created a Profits Paradise website and related social media sites to describe the profits as "huge," "lucrative," and "handsome," and they characterized the risk as "minimal."

The SEC's Enforcement Division alleges that the guaranteed returns were false, and that the investments being offered bore the hallmark of a fraudulent high-yield investment program. Srivastava and Kavuri attempted to conceal their identities by supplying a fictitious name and contact information when registering Profits Paradise's website address. They also communicated under the fake names of "Paul Allen" and "Nathan Jones." After the SEC began its investigation into the investment offering, the Profits Paradise website was discontinued.

"Srivastava and Kavuri used excessive secrecy in their effort to swindle investors through social media outreach and a website that attracted as many as 4,000 visitors per day," said Stephen Cohen, Associate Director of the SEC's Division of Enforcement. "Our investigation stopped the constant solicitations once the website disappeared, and successfully tracked down the identities of the perpetrators behind those fraudulent solicitations," said SEC in a statement.