The SEC has charged a financial advisor with stealing more than $7.5 million from 11 investors in a Ponzi scheme that targeted members of the Persian-Jewish community in Los Angeles.

The SEC alleges that Shervin Neman (formerly known as Shervin Davatgarzadeh), 30, of the Century City section of Los Angeles, in the past two years raised more than $7.5 million from investors who bought into his hedge fund, Neman Financial L.P. Newman claimed the fund invested in foreclosed residential properties that would be quickly flipped for profit as well as in Facebook shares and other highly anticipated initial public offerings, including Groupon, LinkedIn and Angie's List. The SEC claims that essentially all the money Neman raised was used either to pay existing investors or fund his lavish lifestyle.

A U.S. District Court in California granted the SEC's request for a temporary restraining order and asset freeze against Neman and the entities he controlled, according to the SEC's complaint.

The SEC alleges that while Neman promised investors hefty returns resulting from his investing savvy and access to public offering shares of well-known companies, they in fact received other investors' money.

According to the SEC, Neman raised funds from at least 11 investors in the fraudulent securities offering. Most of the investors were members of the Los Angeles Persian-Jewish community along with Neman. Neman spent nearly $1.6 million of investor funds to buy jewelry and high-end cars, and to finance his wedding and honeymoon, lavish vacations, and VIP tickets to sporting events.

"Neman deceived members of his own community to raise money in this fraudulent Ponzi scheme," said Michele Wein Layne, associate regional director of the SEC's Los Angeles office. "By exploiting investors' trust in him, Neman was continually able to raise more money to pay back existing investors and finance an extravagant lifestyle."

--Jim McConville