SEC v. Solomon Lichtenstein — U.S. Securities and Exchange Commission Litigation Release No. 26426, dated November 26, 2025.
The SEC charged Solomon Lichtenstein, founder of Taraxa Capital Fund and Lightstone Trading, with a fraudulent scheme that raised approximately $2.7 million from over 25 investors. Lichtenstein allegedly misappropriated funds for personal expenses and made Ponzi-like payments, leading to investor losses exceeding $1.5 million. The SEC seeks permanent injunctions, disgorgement, and civil penalties.
In Plain English
Imagine someone promising to invest your money in a special fund to make it grow. Instead of investing it, they took a lot of it for themselves to buy things like houses and vacations. They also used money from new investors to pay back earlier investors, like a house of cards. When the money ran out, the whole thing collapsed, and people lost their savings.
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
- Soliciting Investments Solomon Lichtenstein, founder of Taraxa Capital Fund and Lightstone Trading, began soliciting investments in December 2022. He presented Taraxa as a hedge fund for day-trading securities and offered notes from Lightstone with a promised fixed 5% monthly interest payment.
- Targeting Personal Connections Lichtenstein raised at least $2.7 million from over 25 investors. Notably, many of these investors were his family members, neighbors, and friends, indicating a breach of trust within his personal network.
- Misrepresenting Fund Use Instead of investing all the money as promised, Lichtenstein misappropriated approximately $966,000 (or $868,000 from Taraxa and $98,000 from Lightstone) for personal expenses.
- Funding Personal Expenses These misappropriated funds were used for various personal costs, including credit card payments, mortgage payments, and expenses at bars, restaurants, and travel, along with cash withdrawals.
- Ponzi-Like Payments Lichtenstein also used approximately $1.1 million of investor funds to make Ponzi-like payments. This money was used to fulfill redemption requests from Taraxa investors and to cover the fixed interest obligations for Lightstone note holders.
- Fabricating Investment Performance To the extent any money was invested, the actual trading resulted in net losses of approximately $200,000. Lichtenstein concealed these losses by fabricating positive returns on online dashboards for Taraxa investors, falsely showing significant growth.
- Scheme Collapse In the summer of 2024, Lichtenstein's scheme collapsed when he ran out of investor money. He then admitted to several investors that he had used their funds to pay his personal expenses.
- Investor Losses As a direct result of Lichtenstein's fraudulent scheme, investors collectively lost more than $1.5 million.
The Enforcement Action
On October 22, 2025, the SEC charged Solomon Lichtenstein with fraud in the U.S. District Court for the Southern District of New York (Case No. 25-cv-8742). The SEC seeks permanent injunctions, disgorgement and prejudgment interest, and civil penalties. The U.S. Attorney’s Office for the Southern District of New York announced parallel criminal charges against Lichtenstein.
Named in this action: Solomon Lichtenstein.