By Erwin J. Shustak of Shustak Reynolds & Partners, P.C. posted on Tuesday, June 21, 2016.
The Securities and Exchange Commission (“SEC”) announced that it obtained a court ordered “freeze” of the assets of three individuals, including Ash Narayan, formerly of RGT Wealth Advisors, who, the SEC alleges, siphoned millions of dollars from the accounts he managed at RGT for professional athletes and others while he was the manager of RGT Wealth Advisor’s Orange County, California office. According to the complaint, Narayan siphoned money from RGT client accounts he controlled, many of whom were professional athletes, and invested the money into a struggling online sports and entertainment ticket business, The Ticket Reserve, Inc., on whose board of directors he served.
The SEC charged Narayan, along with Ticket Reserve’s CEO, Richard M. Harmon, and COO, John A. Kaptrosky. The SEC obtained a court order freezing the assets of all three individuals.
The SEC alleges that Narayan transferred more than $33 million from the accounts of RGT Wealth Advisor’s clients, many of whom were current or former professional athletes, to The Ticket Reserve, typically without the clients’ knowledge or consent, and often using forged or unauthorized signatures. Narayan purportedly received nearly $2 million in hidden compensation from the company, most of it directly traceable to the stolen funds from RGT client accounts.
According to the SEC’s complaint, The Ticket Reserve was a classic Ponzi scheme which made payments to existing investors from new investors.
Narayan was a managing director of RGT Wealth Advisor’s Orange County, California office. RGT Wealth Advisors, also known as RGT Capital Management, is a Dallas based investment advisory firm which has offices in Orange County and Dallas. Narayan apparently not only failed to mention he was receiving hidden, secret payments from The Ticket Reserve for steering RGT clients into that company, but failed to disclose to RGT clients that he was a member of Ticket Reserve’s Board of Directors and owned a substantial amount of stock in the company.
Harmon and Kaptrosky, in turn, participated in the Ponzi scheme by falsifying and backdating documents and creating sham notes between the company and Narayan to conceal the scheme.
Shustak Reynolds & Partners, P.C. focuses its practice on the securities industry and matters affecting broker-dealers, registered representatives and the financial services sector. For more information, contact Erwin J. Shustak, managing partner, at Shustak@shufirm.com, or call 800.496.5900 for a free consultation.