SEC Obtains Emergency Relief Freezing Assets and Halting an Alleged Ongoing Fraud
(STL.News) The Securities and Exchange Commission has obtained an emergency court order freezing assets of a San Juan Capistrano, California-based company and its founder, who allegedly were carrying out an ongoing investment fraud.
According to the SEC’s complaint, filed on December 21, 2020 in the U.S. District Court for the Central District of California and unsealed on January 7, 2021, Justin Robert King and his company, Elevate Investments LLC, raised about $7.4 million from investors since at least June 2019. The complaint alleges that King and Elevate were offering interests in the Elevate Investment Fund despite the fact that no such fund entity exists. The complaint further alleges that all investor money was held in brokerage and bank accounts in the name of King, his wife, and/or Elevate. As alleged, Elevate’s website stated that, from June 2019 through June 2020, King’s trading resulted in returns of 61% for all his clients’ accounts. In fact, the complaint alleges, King’s trading across all known accounts associated with him resulted in losses of $3.8 million during that period. The website also allegedly represented that King had historically generated profits for his clients year after year, but according to the complaint, King had consistently generated losses. Finally, the complaint alleges that Elevate’s website made false statements about its affiliations with well-known securities industry participants when, in fact, certain purported affiliations had been terminated by the securities industry participant or had never existed. From September 2020 to December 1, 2020, King allegedly transferred almost $400,000 from the brokerage accounts to the bank account of his wife, who is named in the complaint as a relief defendant.
On December 28, 2020, the district court granted the SEC’s request for a temporary restraining order against King and Elevate. The court’s order freezes the assets of King, Elevate, and Shannon King, appoints a temporary receiver over Elevate, and orders King, Elevate, and Shannon King to provide an accounting, among other relief. The court set a hearing on the SEC’s motion for a preliminary injunction extending the emergency relief through the conclusion of the case for January 11, 2021.
The SEC’s investigation was conducted by staff in the SEC’s Los Angeles Regional Office and supervised by Robert Conrrad. The SEC’s litigation will be led by Lynn M. Dean, Kathryn Wanner, and Amy Longo.