Press Release: SEC CHARGES CALIFORNIA-BASED STOCK PROMOTER WITH
DEFRAUDING INVESTORS SEEKING PRE-IPO FACEBOOK AND TWITTER
SHARES
SEC Announces Separate Case Against Broker in Texas for Alleged
Involvement
Washington D.C., Dec. 23, 2014 - The Securities and Exchange
Commission today charged a stock promoter based in Santa Barbara,
Calif., with fraudulently raising nearly $3.5 million from
investors purportedly to purchase Facebook and Twitter shares prior
to their initial public offerings (IPOs).
The SEC alleges that instead of purchasing the shares in the
secondary market as promised, Efstratios "Elias" Argyropoulos and
his firm Prima Capital Group misappropriated investor funds. They
used the money primarily for day trading of stocks and options as
well as to pay off certain investors who complained when they
didn't receive the promised Facebook or Twitter shares.
Argyropoulos agreed to settle the SEC's charges and be barred
from working for an investment adviser or broker-dealer, and
financial penalties will be determined at a later date.
"Argyropoulos capitalized on the high demand for pre-IPO
Facebook and Twitter shares to steal investor money and secretly
fund his own day trading," said Michele Wein Layne, Director of the
SEC's Los Angeles Regional Office.
The SEC's complaint charges Argyropoulos and Prima Capital with
violating the antifraud provisions and broker-dealer registration
provisions of the Securities Act of 1933 and the Securities
Exchange Act of 1934. Argyropoulos and Prima Capital agreed to
settle the charges without admitting or denying the allegations,
and the settlement is subject to court approval.
The SEC separately announced an administrative proceeding
against Khaled A. Eldaher, a registered representative living in
Austin, Texas. The SEC Enforcement Division alleges that while
working for a registered broker-dealer, Eldaher reached a side
agreement with Argyropoulos to solicit investors and receive 50
percent of the mark-up on Facebook shares he sold. Eldaher sold
$362,887.50 worth of Facebook shares and was paid $15,478 by Prima
Capital. He was later terminated by the broker-dealer for selling
securities other than through the firm. The Enforcement Division
alleges that Eldaher's sales of unregistered securities violated
Section 15(a)(1) of the Exchange Act. The matter will be scheduled
for a public hearing before an administrative law judge for
proceedings to adjudicate the Enforcement Division's allegations
and determine what, if any, remedial actions are appropriate.
The SEC's investigation was conducted by Tony Regenstreif and
supervised by Victoria A. Levin of the Los Angeles Regional Office.
The Enforcement Division's litigation against Eldaher will be led
by Karen Matteson.
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