In an urgent response, the Securities and Exchange Commission (SEC) has taken decisive action to halt an alleged Ponzi scheme operated by Nayeem Choudhury, a resident of Durham, North Carolina, and his hedge fund, Dream Venture Capital Group LLC. The SEC filed a complaint with the United States District Court for the Middle District of North Carolina, exposing Choudhury’s deceptive tactics of offering a purportedly risk-free investment opportunity in his hedge fund, while falsely boasting about its exceptional performance.
Contrary to Choudhury’s claims, an investigation revealed his actual track record, which involved consistent monthly trading losses totaling six and seven figures. Over the period from August 2022 to June 2023, Dream Venture incurred losses exceeding $4.8 million in options trading. Moreover, the complaint alleges that Choudhury misappropriated investor funds, using money from new investors to repay existing ones and even funding personal expenses, such as the purchase of an $85,000 luxury car in May 2023. Despite receiving approximately $3.5 million from investors since July 2022, Choudhury and Dream Venture failed to fully reimburse their clients.
The SEC’s Complaint brings forward multiple charges against Choudhury and Dream Venture, including violations of the antifraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and sections of the Investment Advisers Act of 1940. Seeking to protect investors, the SEC seeks various legal remedies, including freezing the defendants’ assets, obtaining a temporary restraining order, securing preliminary and permanent injunctions, imposing conduct-based injunctions, requiring the disgorgement of ill-gotten gains, along with prejudgment interest, and imposing civil penalties.
The SEC’s thorough investigation is currently ongoing, led by Josh Hess, Tiffany Kunkle, and Robert Nesbitt, under the supervision of Matthew McNamara and Justin Jeffries. Heading the SEC’s litigation efforts is Edward Sullivan.