SEC CHARGES MAN FOR BILKING STUDENTS WITH FAKE FEES!

SEC v. Pathyam Patel — U.S. Securities and Exchange Commission Litigation Release No. 26406, dated September 22, 2025.

The SEC charged Pathyam Patel with defrauding at least 15 individuals out of over $430,000. Patel allegedly misrepresented his company's qualifications, guaranteed investment principal, and promised to invest in stocks, options, and crypto. Instead, he misappropriated funds for personal expenses and Ponzi-like payments, also charging bogus fees.

In Plain English

Imagine someone told you they were a super-smart investor, licensed by the government, and could make your money grow safely, even guaranteeing you wouldn't lose it. You give them your savings, but instead of investing it, they spend it on themselves and pay off other people they tricked earlier. They might even invent fake fees to take more of your money. That's what this case is about.

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. Establish a Fake Company Pathyam Patel created a company called Infinity Wealth Management, LLC ('Infinity'). However, this company existed only in name; it had no bank accounts, brokerage accounts, office space, employees, or any assets.
2. Misrepresent Qualifications Patel falsely told clients and prospective clients that Infinity was 'licensed' with the SEC as an investment adviser and that he had qualifications to manage investments for a wide range of clients, including a hedge fund. In reality, neither Patel nor Infinity was registered or endorsed by the SEC.
3. Promise High Returns and Guarantees He deceived investors by claiming he would invest their money in various assets like stocks, options, and crypto assets. Crucially, he also guaranteed the principal they invested, making the investments seem risk-free.
4. Solicit Investments From January 2019 through March 2023, Patel induced at least 15 individuals, many of whom were college students, to invest over $430,000 in principal and purported fee payments.
5. Misappropriate Funds Instead of investing the clients' money as promised, Patel misappropriated most of it. He used these funds to pay for his personal expenses.
6. Operate a Ponzi Scheme Patel also used the invested money to make Ponzi-like payments to other clients, using new investors' funds to pay earlier investors, a hallmark of a Ponzi scheme.
7. Charge Bogus Fees Furthermore, Patel enriched himself by charging clients thousands of dollars in fabricated fees. These included 'transfer fees' and fees he falsely claimed were owed to government entities like the SEC, IRS, and Virginia State Corporation Commission.

The Enforcement Action

The SEC charged Pathyam Patel with fraud. Patel agreed to settle the charges, consenting to a final judgment that would permanently enjoin him from violating antifraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. He would also be enjoined for five years from acting as or being associated with any investment advisor, and from participating in the issuance, purchase, offer, or sale of any security (except for personal trading). The SEC's investigation was conducted by Jennifer Miller and David Medway, with assistance from John V. Donnelly III, and supervised by Kingdon Kase, Gregory R. Bockin, and Scott A. Thompson. The SEC appreciated the assistance of the Alabama Securities Commission.

Named in this action: Pathyam Patel.

Original SEC litigation release ↗ · Browse all cases