On Wednesday, the SEC obtained a temporary restraining order and an asset freeze against Smith and his companies. The court also ordered an accounting and appointed a temporary receiver to administer the defendants’ assets.
Additionally, the court set a hearing on June 3 to consider continuing the asset freeze, issuance of a preliminary injunction, and appointment of a permanent receiver.
In a statement, SEC Los Angeles Regional Office Director Michele Wein Lane said, “Investors should be wary of investments promising no risk and high returns, which are classic warning signs of investment fraud.”
On May 21, the U.S. Attorney’s Office for the Central District of California filed a criminal complaint against Smith.
The Federal Bureau of Investigation (FBI) arrested Smith for operating a Ponzi scheme. He is facing one count of wire fraud that carries a statutory maximum sentence of 20 years in federal prison.
