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SEC Charges Adviser for Running Ponzi Scheme Targeting Haitian Community Including his Family and Friends

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Last week, the U.S. Securities and Exchange Commission’s (SEC) issued a press release to announce that it filed a complaint against Ruless Pierre a/k/a Rules Pierre (Defendant), alleging that he operated a multimillion-dollar investment club that was actually a fraudulent Ponzi scheme targeting members of the local Haitian community as well as his family and friends. 

What does the SEC Complaint allege?

The complaint alleges that the Defendant promised investors in his investment club called the Amongst Friends Investment Group unrealistically high rates of return of at least 20% on Investment Promissory Notes every 60 days.  The Defendant raised more than $2 million from at least 100 investors in the Amongst Friends Investment Group through the sale of Investment Promissory Notes. The Defendant incurred heavy losses trading securities and concealed them by using new investor funds to pay older investors and issuing false account statements showing investment gains. 

The SEC’s complaint also alleges that the Defendant fraudulently raised at least $375,000 from more than 15 investors related to a scheme involving the sale of partnership interests in a fast food chain. The Defendant allegedly sold partnership interests in a fast food franchise, with agreements that falsely guaranteed monthly returns of 10 percent (60 percent per year) plus quarterly profit sharing. At the time he sold these interests, the Defendant knew that the franchise could not provide sufficient profits to pay investors the promised returns.

What is the Defendant being charged with?

The SEC is charging the Defendant with the following violations:

  • Sections 17(a)(1), (2) and (3) of the Securities Act of 1933;
  • Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a), (b) and (c) thereunder; and
  • Section 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder.

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