FAKE FUND FOOLS CUSTOMERS! $2.9 MILLION VANISHES!

SEC v. Rajesh Markan — U.S. Securities and Exchange Commission Litigation Release No. 26564, dated June 12, 2026.

The SEC charged Rajesh Markan, a former registered representative, with defrauding customers. Markan solicited approximately $2.9 million from ten clients for a fake private equity fund, falsely claiming it was advised by a well-known firm and promising above-market returns. He misappropriated most of the funds for personal use. A final judgment permanently enjoins him from violating securities laws and orders him to pay disgorgement and interest, which are deemed satisfied by restitution in a parallel criminal case.

In Plain English

Imagine someone you trusted, who helps you with your savings, told you about a special investment opportunity. They said it was like a secret club for big money, managed by a famous company, and would make you a lot of money over time. You gave them nearly $3 million. But, it turns out the club wasn't real, the famous company had nothing to do with it, and the person took most of your money for themselves. Now, a judge has ordered that person to stop doing this and to pay back the money, though they already did that in a separate 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. The Fake Fund Pitch Rajesh Markan, a registered representative, began soliciting his brokerage customers around 2015. He presented an opportunity to invest in a purported private equity fund, telling them it was advised by a well-known New York private equity firm.
2. Promises of High Returns Markan assured investors that their money would be tied up for six to twelve years. Crucially, he promised them they could expect 'above-market returns' on their investments, enticing them to commit funds.
3. Misrepresenting Fund Status He falsely represented the fund's legitimacy and its association with a prominent firm. In reality, the fund was fake and had never existed, and there was no connection to the New York private equity firm he named.
4. Investor Funds Raised From at least 2015 through July 2024, Markan successfully solicited approximately ten of his brokerage customers. Collectively, these customers invested about $2.9 million into the non-existent fund.
5. Misappropriation of Funds Instead of investing the money as promised, Markan misappropriated most of the investors' funds for his own personal use, betraying the trust placed in him by his clients.

The Enforcement Action

On June 1, 2026, the U.S. District Court for the Northern District of Texas entered a final judgment against Rajesh Markan. The judgment permanently enjoins Markan from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. He is also permanently enjoined from participating in the issuance, offer, purchase, or sale of any security, except for his own personal accounts. Markan was ordered liable for disgorgement of $2,305,025 and prejudgment interest of $132,776.15. These amounts are deemed satisfied by a restitution order of $2,445,000 in a parallel criminal case (United States v. Rajesh Markan). The SEC's investigation was assisted by FINRA, the FBI, and the U.S. Attorney’s Office for the Northern District of Texas.

Named in this action: Rajesh Markan.

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