Fake Fund Scam: $2.9 Million Vanishes, Bosses Faked To Trick Investors!

SEC v. Rajesh Markan — U.S. Securities and Exchange Commission Litigation Release No. 26337, dated June 27, 2025.

The SEC charged Rajesh Markan, a former registered representative, for defrauding customers by soliciting investments in a fake private equity fund. Markan allegedly misappropriated millions of dollars from about ten customers, creating fabricated statements and a fake domain to conceal his scheme. He has since pleaded guilty to criminal charges and was barred by FINRA.

In Plain English

Imagine someone you trusted with your savings told you about a special investment opportunity. They said it was a private fund where your money would grow a lot over several years. But in reality, the fund was completely fake, and the person took most of the money for themselves. To keep the scam going, they sent fake account updates and pretended to be from a real company. Now, legal authorities have charged this person, and they've admitted guilt in a criminal case.

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

1. Soliciting Investments From at least 2015 through July 2024, Rajesh Markan, a registered representative, approached approximately ten of his brokerage customers. He pitched them an investment in a purported private equity fund he called 'Intrinsic Value Portfolio'.
2. Making False Promises Markan falsely told investors that a well-known New York private equity firm advised the fund. He also claimed their money would be tied up for six to twelve years, but assured them of above-market returns.
3. Creating a Fake Fund The SEC alleges that the 'Intrinsic Value Portfolio' fund was entirely fake and never existed. There was no association with any legitimate New York private equity firm.
4. Misappropriating Funds Instead of investing the money, Markan misappropriated most of the approximately $2.9 million collectively invested by his customers for his own personal use.
5. Fabricating Account Statements To lull investors and conceal his fraud, Markan sent them fabricated statements that purported to show their account balances within the fake fund.
6. Impersonating a Firm Markan created a fake domain name to send emails as if he were an employee of the legitimate New York private equity firm, further deceiving his customers about the fund's legitimacy.

The Enforcement Action

The SEC filed settled charges against Rajesh Markan, formerly a registered representative, for defrauding customers by soliciting them to invest in a fake private equity fund. Markan allegedly misappropriated approximately $2.9 million from about ten customers from 2015 through July 2024. He created fabricated statements and a fake domain name to conceal his scheme. In a parallel action, the U.S. Attorney’s Office for the Northern District of Texas filed criminal charges, to which Markan pleaded guilty on June 10, 2025. FINRA barred Markan on October 1, 2024. Markan consented to a settlement, agreeing to a permanent injunction against future violations of antifraud provisions, with monetary remedies to be determined by the Court.

Named in this action: Rajesh Markan.

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