On Tuesday, the regulator said that The US Securities and Exchange Commission had charged a Florida man for crypto payment fraud in two companies where he was a controlling shareholder and officer.
According to SEC allegations, Aron Govil from Jacksonville, Florida, misappropriated investor funds worth more than $7 million in Cemtrex between April 2016 and January 2018. The US regulator said that Govil used funds gained from crypto payment fraud to finance his personal business ventures and pay his expenses. Govil paid stock promoters to recommend retail investors buy Cemtrex stock while he secretly sold the stock, claimed the SEC.
According to SEC’s complaint, Cemtrex was founded by Govil in 1998. He has served in several posts like that of the chairman, CEO, CFO, and executive director of Cemtrex. In October 2020, Saagar Govil, Cemtrex’s present CEO, stated that Govil would be leaving his role as company CFO “due to health reasons and life changes .” The company, Cemtrex could not be reached for comment.
The SEC also claimed that Govil had also made “material misrepresentations” to investors of Telidyne, a 2019 founded company by him. The agency alleges that Govin told Telidyne investors that the company had developed an app that allows users to transact using cryptocurrencies. The allegations also noted that Govil told investors that Telidyne had started work on an app that could detect the coronavirus. The SEC noted that Aron Govil’s statements allegedly were false because the app did not have crypto functionality, nor did Telidyne work on a COVID-19 detection app
For committing the crypto payment fraud, Govil was charged with violations of antifraud provisions of the federal securities law along with violations of sections of the Securities Exchange Act, which makes it a necessity for significant shareholders to disclose their transactions in a company’s stock. Bloomberg reported that Govil had agreed to pay $1.2 million to settle the SEC’s claims but did not admit or deny the crypto fraud allegations.