(HedgeCo.Net) The SEC’s alleges that, from at least January 2016 to May 2019, Elliott, operating through Piptastic, falsely represented to investors that he would use their money for an overseas fund that purportedly engaged in a trading strategy known as “spread trading” or “spreadbet trading,” which involves speculating on the price movement of a security or other financial instrument. According to the complaint, Elliott instead knowingly misused investor assets for his own personal benefit, as well as that of his wife, relief defendant Sharon Elliott, and others including his associate, relief defendant Paul Rose. As further alleged, from at least 2019 through the present, when investors tried to redeem their money from Piptastic, Elliott lied about the status of the investments. Specifically, Elliott allegedly claimed that he had profited from spread betting and that the funds were safely held in trading accounts for the benefit of the investors. Elliott also allegedly provided fictitious account statements that purport to reflect the investors’ preserved assets.
The SEC’s complaint, filed in federal court in Massachusetts, charges Elliott and Piptastic with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks permanent injunctive relief, civil penalties, and disgorgement with prejudgment interest. The complaint also names DSE Retail Limited, a second Elliott-controlled entity; Rose and his entity Unique Asset Management Limited; and Sharon Elliott as relief defendants in connection with their receipt of ill-gotten gains without a legitimate claim to those funds.