SEC v. Harshad Shah, Virendra Parekh, Namah Wealth Creation & Preservation, L.P. — U.S. Securities and Exchange Commission Litigation Release No. 26248, dated February 18, 2025.
The SEC charged Harshad Shah, Virendra Parekh, and their firm Namah Wealth Creation & Preservation, L.P. for a $1.5 million securities offering fraud. They allegedly promised a California investor a 50% annual return on a funding note, falsely claiming it was guaranteed and insured. In reality, the funds were lost in a high-risk investment with a Cypriot firm.
In Plain English
Imagine you give your friend $100 for a special investment. Your friend promises you'll get $150 back in a year, and says it's super safe like a bank, with insurance. But instead of investing it safely, they secretly give it to another person who loses almost all of it. That's what happened here, but with $1.5 million.
Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.
How the Alleged Scheme Worked
- The Setup: A Trusted Advisor's Pitch In February 2020, Harshad Shah and Virendra Parekh, who were licensed insurance agents, pitched a $1.5 million investment opportunity to an existing client, the Namah Investor. They created a firm called Namah Wealth Creation & Preservation, L.P. to facilitate this.
- The False Promises: Guaranteed Returns and Insurance Shah and Parekh falsely represented that the investor's $1.5 million would be used to purchase a 'funding note' issued by Namah Wealth. They promised a guaranteed 50% annual return, claiming international banks would leverage the principal for enormous profits.
- The Insurance Lie Crucially, the defendants also falsely promised that they would obtain and pay for insurance from a leading global insurer to fully guarantee the investor's principal against any loss.
- The Real Plan: A Risky Bet In reality, Shah and Parekh did not have the funds for their own investment opportunity with a Cypriot firm called Xiperias Ltd., which promised 100% monthly returns. They pitched the Namah Investor to raise the necessary capital.
- Ignoring Red Flags Despite Xiperias providing documents with grammatical errors and bizarre language, and refusing to disclose its investment strategy, Shah and Parekh wired the investor's $1.5 million to Xiperias just a week after receiving it.
- No Insurance, No Returns The defendants never obtained the promised insurance policy. They also never received any returns or a refund of the principal from Xiperias.
- The Devastating Loss As of December 2024, the Namah Investor had not received the promised 50% annual return or the return of their $1.5 million principal, except for a single $45,000 payment.
The Enforcement Action
The SEC filed charges against Harshad Shah, Virendra Parekh, and Namah Wealth Creation & Preservation, L.P. for a $1.5 million securities offering fraud. The SEC seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against all defendants, as well as conduct-based injunctions against Shah and Parekh.
Named in this action: Harshad Shah, Virendra Parekh, Namah Wealth Creation & Preservation, L.P..