No Investment Returns From A Most Attractive Opportunity

One of the classic frauds is the “to good to be true” deal. All too frequently investors hear about an opportunity that is so good it becomes virtually impossible to turn down. These are the “once in a lifetime” and just “too good to be true” deals that virtually compel the investor to put up funds and do the deal even though on the surface it seems all too good to even believe. While some can walk past such deals, many cannot. In those instances, the investor puts up his or her hard earned cash. In those instances, the investor is often reminded of what he or she learned long ago – if it is too good to be true, then typically it is – walk away. The Commission’s latest enforcement action is just this and more, with a twist. SEC v Shah, Civil Action No. 5:25-cv-01666 (N.D. Ca. Filed Feb. 18, 2025).

Named as defendants in the case are Harshad Shah, Virendra Parekh and Namah Wealth Creation & Preservation, L.P. The firm, a California limited partnership formed in 2020, is owned by the two individual defendants. Defendant Harshad Shah is a general partner and co-owner of Namah Wealth. He is a broker and holds two licenses issued by FINRA. Defendant Virendra Parkh is a partner and co-owner of Namah Wealth. He is also a licensed California insurance agent.

In February 2020 Defendants encountered an investment opportunity, a “funding note” issued by Hamah Wealth to a California investor. The note required an investment of $1.5 million. The individual Defendants marketed the Funding Note to an existing insurance client. Part of the pitch falsely claimed that Defendants would purchase insurance to guarantee returns. They did not.

Subsequently, Defendants became interested in a second opportunity – a Cyprus firm, Xiperias Ltd. According to the agents of that firm, if Defendants put a minimum of $1.3 million with Xiperias, they would obtain guaranteed returns of 100% every three months. Xiperias provided no information about the mechanics of the investment – how could a 100% return be generated so quickly? When asked the firm stated that the process was confidential. Defendants Shah and Parekh made the investment.

As of December 2024, no returns were paid by Xiperias. Defendants did not obtain the promised insurance to guarantee the returns on the note. The investor’s funds were not repaid with the exception of about $45,000. The complaint alleges violations of Exchange Act Section 10(b) and Rule 10b-5, as well as Securities Act Section 17(a). See Lit. Rel. No. 26248 (Feb. 18, 2025).