Texas investment manager illegally misappropriates $18.5 million of client funds to invest in cryptocurrency, SEC intervenes in investigation

According to an SEC announcement, Texas investment manager Khalid Parekh illegally invested $18.5 million of client funds in cryptocurrency without client consent and promised an annualized return of 4%. Parekh attracted 373 investors from 40 states through its company Fair Invest between August 2021 and August 2022, primarily targeting the Muslim community in the United States and claiming that its investments comply with Islamic law. In fact, he allocated client funds to two cryptocurrency lending platforms instead of traditional assets. During the SEC investigation, Parekh refunded the client's principal and 4% of the promised return, paid a $100000 fine, and revoked its registration as an investment advisor.