SEC - The United States Securities and Exchange Commission
09/21/2023 | Press release | Distributed by Public on 09/21/2023 13:39
Aras Investment Business Group S.A.P.I. de C.V., Armando Gutierrez Rosas, Maria de Lourdes Tolentino Roque, Diayanira Rendon Trejo, Efren Norberto Quiroz Gardea and Luis[...]
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25840 / September 21, 2023
Securities and Exchange Commission v. Aras Investment Business Group S.A.P.I. de C.V., Armando Gutierrez Rosas, Maria de Lourdes Tolentino Roque, Diayanira Rendon Trejo, Efren Norberto Quiroz Gardea and Luis Ricardo Quiroz Gardea, No. 3:23-civ-353 (W.D. Tex. filed Sept. 21, 2023)
SEC Charges Mexico-Based Company, Its CEO, and Four Individuals in Ponzi Scheme Targeting Spanish-Speaking U.S. Investors
The Securities and Exchange Commission today announced charges against Mexico-based company Aras Investment Business Group S.A.P.I. de C.V., its CEO Armando Gutierrez Rosas, and four individuals for fraudulently raising at least $15 million from more than 450 retail investors in the U.S., most of whom were members of the Mexican American community.
The SEC's complaint, filed in U.S. District Court for the Western District of Texas, alleges that, from about March 2020 through November 2021, Gutierrez raised money from retail investors in the U.S. for the purported purpose of investing in U.S. real estate and mining operations in Mexico, promising investors monthly returns as high as 10 percent. According to the complaint, no U.S. investor funds were used for investment purposes; instead, Gutierrez was operating a Ponzi scheme and affinity fraud and used investor funds to pay for his personal expenses including a $2.5 million mansion in Texas. Along with Gutierrez, the SEC also charged Efren Quiroz, Luis Quiroz, Maria Tolentino, and Diayanira Rendon for their roles in the alleged fraud.
The SEC's complaint charges Gutierrez and Aras with violating Sections 5 and 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. It also charges Gutierrez with control person liability under Section 20(a) of the Exchange Act. The complaint charges Efren and Luis Quiroz with acting as unregistered brokers in violation of Section 15(a) of the Exchange Act and, along with Tolentino, with violating Section 5 of the Securities Act and aiding and abetting Gutierrez's and Aras's violations of the antifraud provisions. The complaint also charges Rendon with aiding and abetting Gutierrez' and Aras' violations of the antifraud provisions Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5. The SEC's complaint seeks permanent injunctions, civil penalties, and disgorgement with prejudgment interest.
Without admitting or denying the allegations in the complaint, Efren and Luis Quiroz, Tolentino, and Rendon consented to the entry of judgments against them as to all claims, including full injunctive relief against future violations, with disgorgement and penalties to be determined by the court upon motion by the Commission. The settlements are subject to court approval. Efren and Luis Quiroz also consented to settled Commission orders barring each of them from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization; and from participation in a penny stock offering.
The SEC's Office of Investor Education and Advocacy and the Division of Enforcement's Retail Strategy Task Force have issued an Investor Alert with tips on how investors should avoid investment decisions based solely on common ties with someone recommending or selling the investment.
The SEC's investigation was conducted by Stephen T. Kaiser, with assistance from Margaret Vizzi. Melissa Armstrong and Mr. Kaiser will lead the SEC's litigation. The SEC's investigation was conducted by Stephen T. Kaiser, with assistance from Margaret Vizzi. Mr. Kaiser will lead the SEC's litigation. The case was supervised by Tim England, Melissa Armstrong, and Melissa Hodgman.