Former investment advisor to pay $669k penalty over Grail Movement fraud

A former investment advisor has been found liable for defrauding members of his religious community out of hundreds of thousands of dollars through a years-long deception, according to the SEC.

In a July 8 litigation release, the federal regulator announced it has obtained a final judgment against Evarist C. Amah, who was accused of defrauding members of the Grail Movement, his religious community.

The SEC had previously charged Amah with running a fraudulent investment scheme that misled his clients about his investment performance.

In its complaint filed in August 2021, the SEC alleged that Amah engaged in a scheme from April 2016 to July 2019, raising approximately $700,000 from his advisory clients through materially false and misleading statements.

The Commission's complaint revealed that Amah informed his clients he was generating modest returns on their investments, while in reality, he had lost nearly all their money.

“Despite losing over 97% of his advisory clients’ assets just over five months after starting to trade with their money, Amah repeatedly claimed that he had achieved modest returns of between 3% and 5% and stated that he could increase the returns his strategy was able to generate if his clients invested additional assets,” the 2021 complaint read.

The complaint filed in the Southern District Of New York further stated that Amah fabricated at least two performance statements to conceal his misconduct. When two of his clients had account balances of $4,907 and $1,859, he reportedly gave them doctored statements that showed total assets of $439,751 and $325,794, respectively.

The SEC further charged that Amah flouted his fiduciary duties to his individual clients when he effectively favored another client, a fund he had created, by using their assets to cover the fund's expenses.

On September 28, 2023, the court granted the SEC's motion for summary judgment, finding Amah liable for fraudulently soliciting investments by "consistently offer[ing] positive projections while failing to disclose the serious losses he consistently incurred."

The final judgment, entered on July 2, 2024, permanently enjoins Amah from violating the antifraud provisions of several federal securities laws, including Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934.

The court also ordered Amah to disgorge $10,000 in ill-gotten gains, with $1,617.82 in prejudgment interest, and to pay civil penalties amounting to $669,667.