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SEC Charges Investment Adviser with Affinity Fraud Focused On Christian Investors

(HedgeCo.Net) Dionne Van Zyl, a Georgia-based investment adviser, has been charged with defrauding dozens of clients by taking undisclosed fees, commissions, and other compensation over a period of more than six years.

According to the SEC’s complaint, from 2013 to 2019, Van Zyl used his position of trust as a senior Elder at a suburban Atlanta church, and held himself out to fellow church members as having a background in finance and private equity, to form investment advisory relationships with dozens of congregants. Van Zyl allegedly invested $23.5 million of his clients’ funds into his own failing start-up companies and his related investment fund, and also used clients’ funds for high-frequency forex trading, without disclosing to investors how he was using their funds or the associated investment risks. As alleged, Van Zyl also failed to fully disclose his compensation, telling clients only that he could take certain “advisory” and “consulting” fees. While his clients lost most of their investment funds as a result of his trading activities, Van Zyl collected nearly $3 million in undisclosed fees, commissions, and other compensation.

The SEC’s complaint, filed in federal court in Georgia, charges Van Zyl with violating the antifraud provisions of Sections 206(1), 206(2), 206(4) and Rule 206(4)-8 of the Investment Advisers Act of 1940, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933, and seeks permanent injunctions, civil penalties, and disgorgement plus prejudgment interest against Van Zyl.

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