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SECURITIES AND EXCHANGE COMMISSION REVOKES ASH NARAYAN FROM SECURITIES INDUSTRY

By Erwin J. Shustak, Esq. of Shustak Reynolds & Partners, P.C. posted on Thursday, December 29, 2016.

Erwin J. Shustak, Esq.
619.696.9500 ex. 105
[email protected] 

We previously reported on the problems of RGT Capital Management and its former Managing Director, Ash Narayan.  For those prior articles, please visit www.shufirm.com/blog.

Last week, the Securities and Exchange Commission revoked Narayan from working in the securities industry and working for any broker-dealer, investment advisor, transfer agent, municipal advisor and other, securities related companies. This was part of the SEC’s on-going investigation into Narayan and his diversion of millions of dollars of money belonging to RGT clients into businesses, including the now defunct Ticket Reserve. Specifically, the SEC made the following findings with regards to Narayan:

- Narayan, age 51, is a resident of Newport Coast, California. From February 1997 through February 2016, Narayan was the Managing Director of RGT’s Irvine, California office. Narayan was registered as an Investment Adviser Representative of RGT until the termination of his employment. Prior to working at RGT, Narayan was a Senior Manager at Arthur Anderson in Los Angeles, California. Narayan received a law license in November 1991, obtained a Series 65 license in August 1995, and became a licensed Certified Financial Planner in November 1998.

- On November 21, 2016 a judgment was entered by consent against Narayan, permanently enjoining him from future violations of Sections 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 promulgated thereunder, and Section 206(1)(2) of the Investment Advisers Act of 1940 ("Advisers Act"), in the civil action entitled Securities and Exchange Commission v. Ash Narayan, et al. , Civil Action Number 3:16-cv1417M, in the United States District Court for the Northern District of Texas.

- The Commission’s civil complaint alleges that, while working as an RGT investment adviser representative, Narayan violated his fiduciary duties to his clients by placing them in unsuitable private investments. The complaint further alleges that he often did this without his clients' consent. In addition, the complaint alleges that Narayan received over $1.8 million in undisclosed payments from one of the private companies after placing his clients in these investments. Finally, the complaint alleges that Narayan held himself out as a Certified Public Accountant, even though he was not a licensed CPA.

We will monitor future proceedings involving Naryan and we fully expect a criminal indictment will follow. Typically, in frauds of this kind, the SEC first brings administrative, civil proceedings and, once all facts are developed, the case is referred to the Department of Justice which initiates criminal proceedings. Given the multi-million dollar diversion of money from RGT clients (estimated in the press to be in excess of $40 million), we fully expect criminal proceedings will follow.     

Shustak Reynolds & Partners, p.c. focuses in the areas of securities, financial services and complex business disputes. For more information, contact our managing partner, Erwin Shustak. More information is available at www.shufirm.com

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