- The SEC accused NovaTech of creating a fraudulent scheme worth $650 million
- The founders, Cynthia and Eddy Petion, and the platform’s promoters attached to the case
- This affected more than 200,000 investors who were unable to retrieve their funds in May 2023
Novatech, which collapsed in May 2023, has been sued by the SEC for intentionally creating a fraudulent scheme that cost investors $650 million.
What Exactly Did the SEC Charge NovaTech With?
We recently wrote about Ripple’s big win against the SEC, but apparently, the SEC will not lose in this case because this one is about a clear-cut offense.
NovaTech Ltd., founded by Cynthia and Eddy Petion, promised to invest funds in crypto assets and conducted extensive marketing, claiming earnings from day one.
However, in May 2023, investors were unable to withdraw their funds and filed a collective lawsuit with the SEC to have the case thoroughly investigated.
This Monday, the SEC charged the company with creating a pyramid scheme designed to deceive thousands of users, earning $650 million in the process.
Eric Werner, Director of the SEC’s Fort Worth Regional Office, also clarified that this concerns not only the founders but also promoters, namely Martin Zizi, Dapilinu Dunbar, James Corbett, Corrie Sampson, John Garofano, and Marsha Hadley. For now, Zizi neither admitted nor denied the charges but expressed an intention to settle the conflict.
“NovaTech and the Petions caused untold losses to tens of thousands of victims around the world. As we allege, MLM schemes of this size require promoters to fuel them, and today’s action demonstrates that we will hold accountable not just the principal architects of these massive schemes but also promoters who spread their fraud by unlawfully soliciting victims.”
Conclusions
New York Attorney General Letitia James had previously filed a lawsuit against the Petions for fraud in June, and this lawsuit now takes on a comprehensive nature.
We will likely see further headlines and large figures reflecting the responsibility for misleading such many people.
Let’s continue to monitor comments from all parties involved closely.
