The SEC today charged New York resident Mark Alan Lisser with fraud for operating at least two boiler rooms, on Long Island, New York and in Boca Raton, Florida, through which he raised approximately $2.1 million from at least 71 retail investors and misappropriated more than $900,000 of their funds.

According to the SEC’s complaint, from approximately October 2018 to March 2019, Lisser, and salespeople that he directed in the boiler rooms, solicited investors for Knightsbridge Capital Partners, an unregistered fund manager he operated, by misrepresenting that the Knightsbridge-managed funds had purchased “pre-IPO” shares in three well-known companies directly from employees of the companies.  As the complaint alleges, Knightsbridge did not own any shares at the time it solicited investors and subsequently purchased shares or interests in shares of the companies from third parties, not employees.  Additionally, as alleged in the complaint, Knightsbridge never owned enough shares to cover the sales it had made to investors. 

The complaint further alleges that Lisser and his salespeople falsely claimed to investors that Knightsbridge only charged investors a fee based on the profits after the pre-IPO companies went public, such that Knightsbridge and the investors were on the “same side of the trade,” despite significantly marking up sales and charging commissions.  According to the complaint, Lisser misappropriated over $900,000 of investor funds, including by transferring some of the funds to his personal bank account and using investor funds to pay credit card bills.

“As alleged in the complaint, Lisser victimized dozens of retail investors through high pressure sales tactics, misrepresentations and misappropriation of their funds,” said Richard R. Best, Director of the SEC’s New York Regional Office.  “This case demonstrates our continuing commitment to hold accountable those who operate old-fashioned boiler rooms to solicit investors’ hard-earned savings.”

The SEC’s complaint, filed in federal court for the Eastern District of New York, charges Lisser with violations of the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, and seeks injunctive relief, disgorgement plus prejudgment interest, and civil penalties.

In a parallel action, the U.S. Attorney’s Office for the Eastern District of New York earlier today filed criminal charges against Lisser.

The SEC’s continuing investigation has been conducted by Tejal D. Shah, Hane L. Kim, Joseph Darragh, Chris Ferrante and Michael Paley.  The litigation will be handled by Todd Brody, Ms. Kim and Ms. Shah.  The case is being supervised by Sanjay Wadhwa.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the Eastern District of New York and the Federal Bureau of Investigation.

Investors can check out the background of anyone selling or offering them an investment using the free and simple search tool on Investor.gov.