The US Securities and Exchange Commission (SEC) announced on Friday that it had charged Edgar M. Radjabli of Boca Raton, Florida, and two entities he controlled for engaging in three separate securities frauds, one of them related to a token offering.
According to the press release, Radjabli owned an unregistered investment adviser firm named, Apis Capital Management LLC that allegedly conducted a fraudulent offering of a coin dubbed ‘Apis Tokens’. These cryptos represented tokenized interests in Apis Capital’s main investment fund, the US SEC said. In fact, Radjabli, formerly a practicing dentist, published a press release, falsely claiming such a token offering raised $1.7 million.
Furthermore, the complaint alleges that the former dentist allegedly manipulated the securities market for Veritone Inc., an existing and publicly traded artificial intelligence company, as he announced in 2018 an unsolicited cash tender offer to purchase the firm for $200 million.
However, that was another false statement, as Radjabli and his adviser company did not have any money to make that purchase possible. “Radjabli allegedly generated $162,800 in illicit profits on the resulting increase in Veritone’s stock price by trading Veritone securities on behalf of Apis Capital and an affiliated fund,” the SEC added. The third fraud consisted of another fraudulent securities scheme, as Radjabli allegedly raised around $20 million from more than 450 investors via My Loan Doctor LLC.
Defendants Agreed to Settle
“Radjabli falsely represented that investor funds raised by Loan Doctor would be used to originate loans to healthcare professionals which then would be securitized and sold to large institutional investors. Instead, Radjabli allegedly invested the bulk of the investor funds in unsecured and uninsured loans to digital asset lending firms and loaned almost $1.8 million of investor proceeds to Apis Capital,” the complaint reads.
The defendants in the case have agreed to settle the charges against Radjabli, Apis Capital and Loan Doctor. If the court approves the settlement, it would require Radjabli to pay a total of $600,000 in monetary relief comprised of $162,800 in disgorgement, $17,870 in prejudgment interest and $419,330 in civil penalties.