SEC Charges Massachusetts Resident with $1.2 Million Offering Fraud and Ponzi Scheme

The Securities and Exchange Commission (SEC) has officially levied charges against Jose D. Rocha, a resident of Brockton, Massachusetts, for orchestrating a Ponzi scheme that targeted members of the Cape Verdean community in the Boston area. This fraudulent scheme involved Rocha collecting approximately $1.2 million from 13 investors. He assured these investors that he would invest their funds into securities, guaranteeing them a fixed return rate of 12% each month. However, instead of adhering to these promises, Rocha utilized a minor portion of the funds for high-risk, and ultimately unsuccessful, trades involving stocks and stock options. Most of the funds were diverted towards fueling his gambling addiction and supporting a lavish lifestyle. Additionally, Rocha resorted to using money from subsequent investments to fulfill payouts for earlier investors, thus perpetuating the fraudulent scheme.

The SEC’s formal complaint, submitted to the U.S. District Court for the District of Massachusetts, charges Rocha with violations of the antifraud provisions within Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5. Furthermore, he is charged with contravening Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. As part of a settlement, Rocha has agreed to a judgment that permanently restrains him from violating the aforementioned federal securities laws provisions and from participating in the offer or sale of securities to potential or existing investors. The specific amounts of disgorgement, prejudgment interest, and civil monetary penalties are yet to be determined by the Court.

Simultaneously, Rocha has pleaded guilty to criminal charges of securities fraud that were brought against him by the U.S. Attorney’s Office for the District of Massachusetts. This parallel legal action underscores the seriousness of his fraudulent activities and the coordinated efforts of both civil and criminal regulatory bodies in holding him accountable.