By Jonathan Stempel
The U.S. Securities and Exchange Commission has filed a lawsuit against NovaTech and its co-founders, Cynthia and Eddy Petion, for allegedly defrauding over $650 million from more than 200,000 investors worldwide, including many Haitian-Americans.
NovaTech promised investors their money would be safe and profitable from day one, but the SEC alleges that the Petions used new investments to repay earlier investors and line their own pockets, leading to the company's collapse in May 2023.
The lawsuit comes after the New York Attorney General estimated NovaTech's fraud at over $1 billion and accused the company of running a pyramid scheme. The SEC also charged six promoters for their involvement in the fraud.
Restitution for victims and civil fines are being sought in both lawsuits. This case serves as a warning about the risks of investing in cryptocurrency schemes and the importance of conducting thorough due diligence before putting your money into any investment opportunity.
Analysis:
This article highlights the dangers of investing in fraudulent schemes and the need for regulatory oversight in the cryptocurrency market. It shows how scammers can use promises of quick profits to lure in unsuspecting investors, only to leave them empty-handed when the scheme collapses. By understanding the red flags and risks associated with such investments, individuals can protect themselves and make informed decisions about where to put their money.