A recent University of Georgia graduate ran a Ponzi scheme out of his fraternity house, the Securities and Exchange Commission has alleged.
The SEC said that Syed Arham Arbab, 22, ran a fraudulent hedge fund known as Artis Proficio Capital Management or Artis Proficio Capital Investments, LLC, and raised at least $269,000 from May 2018 to May 2019, using much of the money for his own purposes, including gambling and strip club visits. In a complaint filed Friday, the SEC alleged that Arbab used the rest of the money to pay out the investment returns he promised to clients.
“This is a reminder that investors of all ages and experience levels — whether long-time investors or recent graduates investing funds from their first few paychecks — should carefully research investment opportunities and the people offering them,” said Richard Best, the regional director of the SEC’s Atlanta Office.
The SEC filing identifies the Phi Kappa Tau chapter house at UGA as the location Arbab listed for his hedge fund. It does not allege any wrongdoing by the fraternity chapter.
According to the court document, Arbab, who studied cellular biology and genetics, would also trick new investors into paying old ones by telling them to use mobile payment services to send money directly to a “fintech manager” or partners in the fund, who were actually other investors he owed money to.
“Because no securities trading occurred on behalf of the Fund, the weekly spreadsheets distributed by Arbab and the individual investor profiles on the Fund’s website provided to investors by Arbab were completely fictitious,” SEC lawyers wrote in their filing requesting a preliminary halt to activities by Arbab and his businesses, alleging multiple counts of fraud and continuing efforts to raise money for a nonexistent investment fund.
