The Securities and Exchange Commission (SEC) has formally charged Novatech, its founders Cynthia and Eddy Petion, and several promoters with operating a Ponzi scheme that amassed over $650 million from global investors.
The founders promised significant returns on investments in digital assets and forex markets, which lured numerous individuals into the scheme.
Further investigation revealed that only a small fraction of the collected funds was actually used for market trading. The majority of the funds were allocated to pay earlier investors and to compensate promoters, which is typical of a Ponzi scheme.
The misallocation has had a particularly devastating impact on investors within New York City’s Haitian community.
The SEC’s complaint extends beyond the Petions, naming several individuals involved in promoting the scheme. Promoters like Martin Zizi and James Corbett were instrumental in spreading the fraudulent scheme, drawing in thousands of investors under false pretenses.
The SEC aims to bring justice to the victims by holding these promoters accountable alongside the scheme’s primary architects.
In response to the alleged fraud, the SEC is pursuing comprehensive legal measures including injunctive relief, monetary penalties, and the forfeiture of profits to compensate the investors affected by the scheme.
In a parallel legal action, the Attorney General of New York, Letitia James, launched a lawsuit in June 2024 against Novatech and AWS Mining. This case focuses on the financial losses sustained by over 11,000 New York City citizens, emphasizing the company’s exploitation of religious figures and social influencers to deceive potential investors.
The enforcement actions by the SEC and the New York Attorney General represent significant steps toward rectifying the injustices faced by thousands of misled investors, aiming to restore faith in the financial markets by rigorously pursuing fraudsters and safeguarding public interests.
Also Read: New York AG Sues NovaTech and AWS Mining for $1B Fraud
