Fraudster Raises over $1 Million From Investors
Repeatedly the Commission has filed enforcement actions against persons alleged to have fleeced potential investors through a fraudulent scheme. The schemes involve a variety of frauds fact patterns. For example, many involve the sale of penny stocks that may be worthless. Nevertheless, the sale pitch from the fraudster makes the near or actually worthless shares sound like the next best thing. The variations of these schemes are endless. Perhaps the best option for avoiding schemers such as these is to only deal with those you know or can carefully research. The Commission’s latest case in this area is SEC v. Bell, Civil Action No. 24-03403 (D. Colo. Filed December 9, 2024).
Defendant Ian G. Bell is a resident of Denver, Colorado. Prior to December 2023 he had not had a full time job since at least 2019. He was, however, an investment adviser representative of a Denver based advisor. Mr. also held a securities industry license.
Beginning in July 2020, and continuing until March 2023, Mr. Bell sold interests in his day trading operation which conducted transactions involving index futures contracts. Over the period Mr. Bell raised in excess of $1.3 million from investors. Those investors were told about his day-trading operation which involved index futures contracts and other commodities. In the early part of the operation he raised about $100,000 from at least six investors. He was entrusted with the money based on assertions that it would be invested in his day-trading operation. Profits were to be made.
By mid-2021, Mr. Bell had expanded his fundraising to include family and groups of friends. From May 2021 to July 2022 Defendant raised over $1 million in additional funds from another 23 investors for his program. Mr. Bell repeatedly told investors that he had been successful as an investor. Some investors were told that his program was not just successful but safe. Investors were not given written materials about his program or strategy. No materials were furnished about his claimed record of success.
In fact, Mr. Bell was an unsuccessful trader. Typically, his trading losses exceeded his profits. Mr. Bell fabricated performance information to distribute to investors. The reports made it appear that there were significant profits. In fact, there were not. The complaint alleges violations of Securities Act Section 17(a) and Exchange Act Section 10(b) and Rule 10b-5, thereunder. A parallel action was filed by the U.S. Attorney’s Office for the District of Colorado. See Lit. Rel. No. 26189 (Dec. 10, 2024).