The Securities and Exchange Commission on Tuesday unsealed court documents charging an investment adviser with defrauding professional athletes and investing more than $33 million in a failing sports and entertainment ticket company where he served as a board member.
The SEC says Ash Narayan transferred sums from his clients’ accounts — often forging their signatures — to The Ticket Reserve Inc., whose chief executive, Richard M. Harmon, and chief operating officer, John A. Kaptrosky, are also charged in the scheme. The SEC froze the defendants’ accounts on May 24, according to a complaint unsealed today.
“We allege that Narayan exploited athletes and other clients who trusted him to manage their finances,” Shamoil T. Shipchandler, director of the SEC’s Fort Worth Regional Office, said in a statement. “The asset freeze stops the uncontrolled spending of investor assets within The Ticket Reserve until the case is resolved, preserving money that rightfully belongs to Narayan’s clients.”
The SEC did not name any of the professional athletes affected by the case.
The Ticket Reserve became dependent on Narayan’s fraudulent payments and provided him $2 million in illicit compensation in return, in addition to making “Ponzi-like” payments to existing investors using money from new investors, according to the SEC. After being fired from his investment firm, Narayan redirected fraudulent fees from money he taken from former clients’ accounts to The Ticket Reserve, the SEC said.
The agency also accused Narayan of falsely claiming to be a certified public accountant and hiding his shares in The Ticket Reserve and his position on the board.