SEC Shuts Down Zera Financial LLC Offering Fraud

The Securities and Exchange Commission (SEC) has taken swift action by obtaining an emergency order to halt an alleged ongoing offering fraud and Ponzi-like scheme orchestrated by Zera Financial LLC (Zera) and its owner, Luis A. Romero. These entities have managed to amass over $2.2 million from approximately 170 investors.

According to the SEC’s complaint, Zera and Romero lured investors through various means, including a public website, a mobile application, an Instagram account, and word of mouth. They made audacious promises of 3% monthly returns, which equates to a staggering annual return of more than 36%, on investments as low as $500. The complaint further alleges that Zera and Romero falsely claimed that investments in Zera were FDIC insured, a misrepresentation aimed at bolstering their scheme. Additionally, Romero allegedly posed as a Zera investor on an online forum to quell suspicions about the implausibility of the promised returns. The complaint goes on to assert that Zera has no legitimate business activities apart from raising funds and making Ponzi-like payments to investors. Furthermore, Romero is accused of misappropriating and commingling investor funds with his personal finances. The complaint outlines that Romero deposited hundreds of thousands of dollars into various crypto asset accounts under his name and utilized substantial amounts for personal expenses, including the purchase of an electric truck, rent, and even tropical fish.

To address the situation promptly, the court has granted the SEC emergency relief against both Zera and Romero. This relief includes a temporary restraining order and an asset freeze. A hearing has been scheduled for October 11, 2023, to determine whether to issue a preliminary injunction.

The SEC’s complaint, filed in federal court in the Central District of California, charges the defendants with violating antifraud provisions under Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, along with Rule 10b-5. The SEC seeks a range of remedies, including permanent injunctions, conduct-based injunctions, disgorgement with prejudgment interest, civil penalties, and, specifically concerning Luis A. Romero, an officer and director bar.