The complaint, filed April 15, alleges that Nambiar solicited investments through online chatrooms on platforms such as Telegram and through connections in the Indian American community in the San Francisco Bay Area and across the country. According to the SEC, Nambiar told investors he would pool their funds to trade securities and promised annual returns of 20% to 40%.
In reality, the complaint alleges, Nambiar "suffered total trading losses of approximately $21 million" across accounts at about six brokerage firms between November 2018 and May 2024. "During the over five-year period, Nambiar never once had a profitable year," the SEC alleged.
The complaint describes multiple instances of fabricated records. The SEC alleges Nambiar "created and sent some investors false spreadsheets and account statements" that "appeared to show consistently positive returns." In one instance, according to the complaint, Nambiar told a prospective investor in March 2020 that his year-to-date returns were 2,500%, when he had actually lost hundreds of thousands of dollars. In another, the SEC alleges he posted in a Telegram group that the trading operation had cleared a "million in gross profit" at mid-year 2022, while his actual trading had "amassed over $3 million in losses."
To keep the scheme going, the complaint alleges, Nambiar took out approximately $8 million in high-interest loans from cash advance companies and made roughly $18 million in Ponzi-like payments to existing investors using new investor funds. The SEC also alleges Nambiar "misappropriated hundreds of thousands of dollars of investor funds to pay for his own and his family's personal expenses, including hotel and resort stays, student loan payments, and private school tuition."
The complaint further alleges that Nambiar ran a separate private fund, Spartan Trading Capital Fund, LP, from late 2020 through April 2021, raising approximately $900,000 from nine investors. According to the SEC, Nambiar pitched the fund as a "next step to enter bigger leagues" while allegedly concealing his trading losses and the ongoing Ponzi-like scheme. The fund collapsed within months, the complaint states, with a gross asset value of $982 as of March 2023.
By late 2023, according to the complaint, Nambiar was running out of money and could not satisfy all withdrawal requests from investors. The SEC alleges he gave investors false excuses, including that his bank accounts had been temporarily frozen by the Internal Revenue Service or the SEC itself. In March 2024, the complaint states, he muted investors in the Telegram chatroom and stopped responding. "Many of Nambiar's investors have suffered a total loss of their investments," the complaint alleges.
The SEC is seeking permanent injunctions, disgorgement with prejudgment interest, civil penalties, and orders barring Nambiar from securities offerings and from acting as an investment adviser. The SEC has requested a jury trial.