SEC Accuses NovaTech of Fraud After $650 Million Investor Scam
SEC Charges NovaTech with Fraud
The U.S. Securities and Exchange Commission (SEC) is suing NovaTech, a crypto firm, under serious allegations. The startup is accused of fraudulently raising over $650 million from more than 200,000 investors.
Nature of Allegations
The SEC claims that NovaTech, founded in 2019 by husband-and-wife duo Cynthia and Eddy Petion, operates as a multi-level marketing (MLM) scheme. Investors were drawn in by promises of profitable investments in the crypto and foreign exchange markets.
Misallocation of Funds
- The majority of investor funds were not allocated to trading.
- Instead, most funds went towards payments to existing investors.
- Additionally, significant amounts were used for commissions for promoters.
Conclusion
The SEC seeks to hold NovaTech accountable for their business practices, aiming to protect the rights of defrauded investors and maintain market integrity.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.