1. Affinity Fraud Hit Minnesota's Indian-American Community.
2. A 'Losing' Covered-Call Equities Trading Program in Georgia.
3. Clueless CA. AXA Broker/Adviser Sold Oil & Gas Investments Away From Firm.

• Patel sold at least 4 investors nearly $1.4 million of promissory notes, falsely promising a low-risk stock option trading strategy, guaranteed fixed monthly returns of 1-2% from trading profits, and guaranteed repayment of their principal.  He misappropriated over $572K, and pooled the rest with his personal brokerage accounts, where he traded with a self-described high risk and speculative strategy called Iron Condor.  Nearly all investor money was lost. 
• Patel persuaded at least 4 investors to grant him “limited trading authority” over at least $1.1 million in additional funds deposited in investors’ online brokerage accounts, promising to trade on their behalf using a safe and conservative strategy.  High risk trading and speculative investments resulted in another $950K in net losses.  [SEC Litigation Rel. 21790, 12/22]

    2.  A Fraudulent and Losing Covered-Call Equities Trading Program in Georgia.   The SEC charged a Georgia man and his 2 related entities with making false and misleading statements in connection with an unregistered covered-call equities trading program.  Kenneth Burnt, through Perimeter Wealth Financial Services and KSB Financial, allegedly raised $4.5 million from more than 20 investors by promising:  (i) guaranteed annual investment returns of 8% - 12%;  (ii) advisory fee payouts after investors earned 8% minimum annualized returns;  and (iii) any principal losses or shortfalls to the guaranteed returns would be contractually covered by a reserve account funded by defendants.  Representations were false, and Burnt drew down his fees from the "get-go" and the purported reserve account was inadequately funded.  From inception through 11/30/10, the covered-call program has incurred 15% losses.   [SEC Litigation Rel. 21789, 12/22]

    3.  Clueless CA. AXA Broker/Adviser Sold Oil & Gas Investments Away From Firm.   The SEC charged a former Irvine, CA, broker and investment adviser with AXA Advisors with making material misrepresentations and omissions on oil and gas ("O&G") working interests sold to clients from August 2008 to November 2009.  Ms. Sabado allegedly erred re: risks of the returns, projected returns and her family’s investment.  Six clients purchased nearly $500,000 in working interests in Halek Energy oil and gas leases.  Sabado earned commissions ranging from 8% to 10% for each sale;  she was paid in the form of working interests.  Among Sabado's misrepresentations and omissions:

• She had no experience selling or investing in O&G working interests, and she did no meaningful due diligence on Halek Energy or the investments it was selling. 
• She violated AXA policies by selling the interests outside of the firm, and had not sought the firm's prior approval.
• She misrepresented that some clients could expect monthly “dividends” of $1,200 to $2,500, beginning within 3 months of their initial investment.
• She falsely represented to some that her family invested in Halek Energy, upon which they were receiving $5K a month.
• She failed to adequately disclose the risks involved in the O&G investments, telling clients that the project included a proven well and that they “most likely” would receive the promised returns.
• She misrepresented to Halek Energy (in subscription documents) that one of her clients was a sophisticated, accredited investor, when in reality he was a financially unsophisticated 24-year-old blind man who sought a safe, income-producing product for over $139,000 he received as part of the settlement of a lawsuit over the accident that caused his blindness.
• She continued to solicit other Halek Energy O&G sales even after earlier clients complained that they weren't receiving the promised returns.   [SEC Litigation Rel. 21789, 12/22]