In a recent emergency action, the Securities and Exchange Commission (SEC) has charged Syed Arham Arbab, a recent college graduate, with running a Ponzi scheme. This scheme, operating under the name “Artis Proficio Capital,” allegedly targeted college students and young investors. The SEC is urgently seeking an asset freeze and other emergency measures to protect investor funds.
According to the SEC’s complaint, Syed Arham Arbab, 22, conducted this fraudulent operation from a fraternity house near the University of Georgia. He reportedly enticed investors with opportunities in a supposed hedge fund, “Artis Proficio Capital.” Arbab falsely claimed this fund had achieved returns as high as 56% in the previous year and offered guarantees on investments up to $15,000. Additionally, he allegedly marketed “bond agreements” promising investors both the return of their principal and a fixed rate of return. The SEC alleges that at least eight individuals, including college students, recent graduates, and their family members, invested over $269,000 based on these deceptive pitches.
The SEC’s complaint details that “Artis Proficio Capital” was not a legitimate hedge fund, and Arbab’s reported investment returns were entirely fabricated. Contrary to his claims, investor funds were never invested. Instead, Arbab allegedly diverted substantial portions of the money into his personal bank and brokerage accounts. These funds were then used for personal expenses, including trips to Las Vegas, shopping sprees, travel, and entertainment. In a classic Ponzi scheme tactic, Arbab is accused of using funds from new investors to repay earlier investors who requested their money back. He even directed new investors to send their funds directly to existing investors through payment apps like Venmo, Zelle, and Cash App, misleadingly identifying these existing investors as “partners” or “managers” in the supposed fund.
Filed in the federal district court in Athens, Georgia, the SEC’s complaint names Arbab, Artis Proficio Capital Investments LLC, and Artis Proficio Capital Management LLC as defendants. The charges include violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and Sections 206(1), (2) and (4) of the Investment Advisers Act of 1940, and Rule 206(4)-8. The SEC is seeking a freeze on Arbab’s and his entities’ assets, a temporary restraining order, preliminary and permanent injunctions, the return of ill-gotten gains with prejudgment interest, and civil penalties.
The SEC investigation was carried out by Brian M. Basinger, W. Shawn Murnahan, and Krysta M. Cannon from the Atlanta Regional Office, under the supervision of Stephen E. Donahue. The litigation is being managed by Mr. Murnahan, assisted by Mr. Basinger, and overseen by M. Graham Loomis. This case serves as a stark reminder of the risks associated with unregistered investment schemes and the importance of due diligence before investing, especially for young and inexperienced investors.
