A Santa Barbara, Calif., stock promoter has been charged by the SEC with fraudulently raising nearly $3.5 million from investors who thought they were buying pre-IPO shares in Facebook and Twitter, the SEC announced.
The SEC alleges that instead of purchasing the shares in the secondary market as promised, Efstratios “Elias” Argyropoulos and his firm, Prima Capital Group, misappropriated investor funds. Argyropoulos used the money for his own day trading of stocks and options, as well as to pay off investors who complained when they did not receive the promised Facebook or Twitter shares.
Without admitting or denying guilt, Argyropoulos agreed to settle the SEC’s charges and be barred from working for an investment advisor or broker-dealer. Financial penalties will be determined at a later date.
“Argyropoulos capitalized on the high demand for pre-IPO Facebook and Twitter shares to steal investor money and secretly fund his own day trading,” says Michele Wein Layne, director of the SEC’s Los Angeles regional office.
In a separate action, the SEC charged Khaled A. Eldaher, a registered representative living in Austin, Texas, with soliciting investors for Argyropoulos by selling nearly $363,000 worth of Facebook shares. A hearing date on the charges has not been set.