- Two crypto investment firms in trouble after mis-managing investors fund
- CEO Govil allegedly diverted investors stake for personal use
- Govil denies all allegations leveled against him by SEC
The U.S. Securities and Exchange Commission has dragged two crypto investment firms ( Aron Govil, CEO of Cemtrex Inc., and Telidyne Inc. Mr. Govil) for allegedly defrauding investors.
Among several allegations by the SEC, one has it that Govil purposely misled investors hiding under false pretense of the company’s products.
SEC alleged that Govil falsely announced that Teledyne developed the so-called “Teli App” that would allow users to use cryptocurrencies for transactions from their mobile phones. Beyond crypto, the firm was alleged of falsely stating that it is working on an app that can detect COVID-19.
The American regulator nailed the so-called crypto investment firm on allegations that the Teli App the firm had no crypto functionality in any way. The firm also lied about developing an app that detects COVID-19.
The other crypto investment firm, Cemtrex Inc. and Telidyne Inc. mismanaged more than $7m of investor’s funds between 2016 and 2018. Govil, the firm CEO, allegedly diverted those funds for personal use. He was alleged of further selling stocks of the firm secretly as he paid promoters to push the company’s stocks to retail investors.
SEC speaks on crypto investment firms
Richard R. Best, director of the SEC’s New York Regional Office, while speaking further on allegations brought against both crypto firms, said that Govil flooded the market with several recommendations for Cemtrex company stock. He also made false statements about mobile app development that would have crypto functionality and help detect the coronavirus.
The SEC official said that he capitalized on popular market trends like cryptocurrencies and COVID-19 for personal financial gains.
He advised investors to be cautious of online recommendations especially coming from quarters that are not recognized capitalizing on market trends.
However, all the allegations brought against Govt, he has denied. He is yet to consent to all the allegations levied against him verbally.