A federal grand jury in Los Angeles indicted investment advisor Motty Mizrahi and his brother Sassi Mizrahi, who targeted members of the Jewish community in Los Angeles, on wire fraud charges and aiding and abetting last month.
The Securities and Exchange Commission charged Motty and his firm, the MBIG Company, in March with defrauding over 40 investors, including his employer, a private high school.
The SEC alleged that he held himself out as a licensed professional money manager, broker and certified public accountant. He told investors he was using "risk-free" trading strategies with "guaranteed returns," that their principal could be redeemed "on demand," and that he would be compensated only by sharing 25% of their profits, according to the claims.
Instead, according to the SEC, he transferred millions in investors’ money to his personal trading accounts, where he amassed large losses, and also converted investor money to personal use. In addition, Mizrahi allegedly provided the investors with false account statements that showed illusory gains and fictitious brokerage statements purporting to show millions in reserves, falsely assuring them that their funds were safely invested.
The brothers were arrested in March. Both face federal prison time if convicted.
