TechFlow news, November 26 — According to DL News, the U.S. Securities and Exchange Commission (SEC) has charged Texas-based fund manager Khalid Parekh with illegally investing $18.5 million of client funds into cryptocurrency without clients’ consent.
According to the SEC, from August 2021 to August 2022, Parekh raised $18.5 million from 373 investors across 40 states through Fair Invest, a firm he solely managed. He primarily attracted Muslim American investors through radio programs, podcasts, and media interviews, claiming that his fund complied with Islamic Sharia law.
Parekh promised investors an annual return of 4%, stating these returns were generated from traditional assets such as stocks, mutual funds, commodities, and ETFs. However, the SEC's allegations reveal that he actually allocated client funds to two cryptocurrency lending platforms without disclosing this to investors.
During the SEC investigation, Parekh returned all client funds along with the promised 4% returns. Additionally, he agreed to pay a $100,000 penalty and surrendered his SEC registration as an investment adviser.
