Washington D.C., Sept. 29, 2020 —
The SEC’s complaint alleges that from November 2012 to June 2019, Roger Nils-Jonas Karlsson, through his entity, Eastern Metal Securities, defrauded over 2,000 retail investors in nearly every state in the United States, as well as in over 45 countries around the world. According to the complaint, Karlsson solicited investors for what he described as a “Pre Funded Reversed Pension Plan,” falsely claiming that the investment platform was run by award-winning economists and promising a payout based on the value of gold. Karlsson allegedly claimed that the investment had no risk of loss. At least 847 of the investors were members of a community for the Deaf that invested more than $2 million in Eastern Metal Securities since 2015 as their retirement investment. The SEC alleges that Karlsson raised $3.5 million from December 2017 through June 2019, and misappropriated at least $1.5 million to purchase real estate in Thailand and for other personal expenses.
“We are committed to fighting securities fraud that targets our country’s most vulnerable communities,” said Richard R. Best, Director of the SEC’s New York Regional Office. “As alleged in the complaint, Karlsson’s scheme jeopardized the hard-earned savings of thousands of retail investors.”
The SEC alleges that Karlsson violated the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 and the antifraud provisions of 17(a)(1) and 17(a)(3) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and 10b-5(c) thereunder, and seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties.
This matter was investigated by Karen M. Lee, John C. Lehmann, Jordan Baker, and Thomas P. Smith, Jr. of the SEC’s New York Regional Office, and Mika Donlon and Charu A. Chandrasekhar of the Division of Enforcement’s Retail Strategy Task Force. The litigation will be led by Richard Hong, and the case is being supervised by Sanjay Wadhwa, both of the SEC’s New York Regional Office.
The Retail Strategy Task Force encourages investors in the Deaf, Hard of Hearing, and Hearing Loss communities to learn more about how to spot frauds in their communities and how to protect themselves and others from investment fraud through the Task Force’s investor outreach video for the Deaf, Hard of Hearing, and Hearing Loss communities.
The SEC appreciates the assistance of the U.S. Attorney’s Office for the Northern District of California, the Internal Revenue Service, the securities and financial markets regulatory authorities in Austria, Finland, France, Hong Kong, Malaysia, Romania, Singapore and Thailand, and the National Bureau of Investigation of Finland.