U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23842 /May 24, 2017
Securities and Exchange Commission v. Gustavo A. Guzman,
Civil Action No. 3:17-cv-00276 (W.D.N.C., filed May 24, 2017)
SEC Charges Former Trading Instructor with Defrauding Private Fund Investors
The Securities and Exchange Commission today filed fraud charges against a former options trading instructor, alleging he misappropriated investor funds and made material misrepresentations to investors located in five states – North Carolina, South Carolina, Illinois, Washington, and California.
The SEC’s complaint, filed in federal court in the Western District of North Carolina, alleges that between at least April 2010 and at least August 2015, Gustavo A. Guzman raised more than $2.1 million from investors for a purported equity options fund and a real estate fund that he managed. The complaint further alleges that Guzman misappropriated approximately a third of the investors’ money, using it to pay himself and his personal expenses, and to make Ponzi payments to some of the investors. Guzman also allegedly sent investors false account statements and tax documents with exaggerated returns to conceal that he lost the remainder of the investors’ funds through unsuccessful options trading.
The SEC’s complaint charges Guzman with violating Sections 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), (2), and (4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. The complaint seeks injunctive relief, disgorgement, prejudgment interest, and a civil penalty.
The SEC’s investigation was conducted by Jonathan I. Katz and Paul Montoya of the SEC Enforcement Division’s Asset Management Unit and Ann Tushaus of the Chicago Regional Office. The litigation will be led by Mr. Katz and John Birkenheier, Supervisory Trial Counsel in the Chicago Regional Office. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Western District of North Carolina, the Federal Bureau of Investigation’s Charlotte Field Office, and the North Carolina Securities Division.