SEC Charges New York Resident with Fraudulent Pre-IPO Investment Scheme

The U.S. Securities and Exchange Commission (SEC) announced charges against New York resident Ian Mitchell for defrauding investors in an offering fraud scheme. 

The SEC's complaint, filed in the U.S. District Court for the Southern District of New York, alleges that between July 2021 and February 2022, Mitchell solicited investors by falsely representing his identity, family background, wealth, and ability to access private placement stock, as well as his intended use of the investors’ funds.

Mitchell is accused of using a fictitious name and falsely claiming to be the nephew of an African billionaire. He allegedly told investors that their money would be used to purchase pre-IPO stock of two privately owned companies. However, the SEC alleges that Mitchell used the $325,000 he received from two investors for personal expenses, instead of purchasing stock.

Mitchell consented to a final judgment permanently enjoining him from violating federal securities laws. The judgment also includes an officer and director bar and orders Mitchell liable for $325,000 in disgorgement and $53,072.65 in prejudgment interest.

 In a parallel criminal action, Mitchell pled guilty to one count of wire fraud. On July 11, 2024, he was sentenced to 44 months in prison, followed by three years of supervised release. Mitchell was also ordered to pay $469,999 in restitution and $469,999 in forfeiture.