SEC charges day trader with running $43 million Ponzi-like scheme

The Securities and Exchange Commission has accused a California day trader of running a $43 million Ponzi-like scheme that allegedly defrauded more than 400 investors. 

In a civil action filed on April 15 in the Northern District of California (SEC v. Nambiar, Case No. 5:26-cv-03203), the SEC alleges that Sudheesh Nambiar, 39, of Milpitas, California, lured investors through Telegram chatrooms and personal connections in the Indian American community across the San Francisco Bay Area and the broader United States, promising annual returns of around 20% to 40% through his purported investment operation known as Spartan Trading. 

According to the SEC, Nambiar told investors he would pool their money to trade securities, giving them 70% of the profits while keeping 30% as compensation. He allegedly sent them fabricated account statements, Excel spreadsheets, and charts showing a near-perfect trading record on a daily basis. He also allegedly posted false performance updates in a dedicated Telegram investor chatroom, drawing praise from investors who believed their money was growing. 

None of it was real, the SEC alleges. Behind the scenes, Nambiar allegedly racked up approximately $21 million in trading losses across accounts at about six brokerage firms — and never once had a profitable year during the entire duration of the scheme, from at least November 2018 through May 2024. One brokerage firm allegedly sent him several warning letters in 2022 and 2023 about his substantial losses. 

To keep the operation afloat, Nambiar allegedly took out roughly $8 million in high-interest loans from cash advance companies and funneled new investor money to pay earlier investors — totaling approximately $18 million in Ponzi-like payments. The SEC also alleges he siphoned hundreds of thousands of dollars for personal expenses, including hotel and resort stays, student loan payments, and private school tuition. 

While Spartan Trading was still running, Nambiar allegedly launched a separate private fund, Spartan Trading Capital Fund, LP, raising about $900,000 from nine investors between late 2020 and April 2021. He allegedly failed to disclose to those investors that his trading track record was built on losses and that Spartan Trading was, in the SEC's words, a Ponzi-like scheme. The fund collapsed within months. By March 2023, its gross asset value had dwindled to just $982. 

The whole operation allegedly came apart by May 2024, when investors began demanding their money back and Nambiar could not pay. In March 2024, he allegedly cut off all investors' ability to post in the Telegram chatroom and went silent on many of them. Many are alleged to have lost everything. 

The SEC is seeking permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, civil monetary penalties, and a permanent ban on Nambiar from acting as or being associated with an investment adviser. The case remains in its early stages, with no final determination having been made. 

For wealth management professionals, the case is a sharp reminder that fabricated performance records and promises of outsized returns remain among the most persistent threats in the advisory space — and that enforcement actions continue to follow.