A California was was arrested Thursday and charged with investment fraud in what authorities allege was a $2.4 million Ponzi scheme. Janamjot Singh Sodhi, who goes by the name Jimmy Singh, was arrested and released on Friday without being required to post bail due to his lack of a criminal record.
Singh is accused of soliciting investments through his company, Elite Financial, that he started in 2003. While Singh purported to act as an investment advisor, potential investors were not informed that Singh had previously been disciplined by the New York Stock Exchange in 2005 after being accused of misappropriating nearly $500,000 while working as an agent for a licensed broker-dealer. As a result of that incident, Singh was barred from any future association with firms in the New York Stock Exchange. Further, authorities allege that Singh and Elite Financial failed to register in their capacity soliciting investors, in violation of California securities laws. Following complaints from investors in 2009, the California Business, Transportation and Housing Agency issued a desist-and-refrain order to Singh and Elite Financial barring them from conducting future business until a securities license had been obtained.
Singh's attorney expects a federal grand jury to indict his client within weeks. He stated that Singh will plead not guilty to any charges.
A copy of the Desist-and-Refrain letter is here.