Cooperation and Its Impact

The impact of cooperation on a Commission investigation can be difficult to assess. The agency has long espoused cooperation as a way to mitigate the ultimate resolution of an investigation and any possible sanctions. The agency typically acknowledges the impact of cooperation. Determining how that cooperation impacted the ultimate resolution of an investigation is a more difficult issue – the agency typically makes only a general statement that acknowledged cooperation occurred and was taken into account. Consider the most recent case in this area, In the Matter of Fair Invest, LLC, Adm. Proc. File No. 3-22331 (Nov. 25, 2025).

Named as respondents in the Order are Fair Invest, LLC and Khalid Parekh. The former became a Commission registered investment adviser on July 12, 2021, and began operations the following September. By year-end the next year, the advisor withdrew its registration statement. Mr. Parekh was the managing member and CFO of the advisory, controlling its operations and signing the firm’s Form ADV.

During its short term of operation, Fair Invest raised about $18.5 million for 373 investors in 40 states. The funds were raised in an unregistered offering of an investment product called Wealth Building Account. Respondents targeted the Muslin community.

Potential investors were promised annual dividends of up to 4%. The returns would come by investing client funds in equities, ETFs, mutual funds and tangible commodities. Client funds would be held in a SIPC-insured account that would be custom tailored to the financial needs and objectives of each client.

The promises to investors were false. They were not honored. The investor funds were pooled and controlled by Respondent Parekh who received a share of the earnings generated, a fact not disclosed to investors. The Order alleges violations of Securities Act Sections 5(a), 5(c) and 17(a)(2) & (3) as well as Advisers Act Sections 206(2) and 206(4) along with Rule 206(4)-2.

To resolve the proceedings the Commission acknowledged the remedial acts of Respondents which were promptly undertaken and included the repayment of all clients with the promised investment returns and the withdrawal of the firm’s registration statement. Respondents also cooperated with the staff investigation.

Each Respondent consented to the entry of a cease-and desist order based on the provisions cited above. Each was censured. The Respondents also agreed to pay, on a joint and several basis, a penalty of $100,000,