SEC’s increasing scrutiny trend bodes well for anti-fraud professionals

On July 19, 2021, the U.S. Securities and Exchange Commission (SEC) alleged that Aron Govil defrauded investors of over $7 million through a scheme using investor funds in two companies he controlled, Cemtrex Inc. and Telidyne Inc., for personal expenses. The SEC also alleged that Govil engaged in scalping, insider trading and failing to file required disclosures with the SEC.

Combining two ripe areas for fraud, Govil recruited investors to Telidyne that had created “Teli App,” a mobile application he claimed would allow users to trade cryptocurrency. Govil also promoted Teli App as a COVID-19 detection app. The enforcement division found both claims to be false and assessed a civil penalty of $620,000. (See “SEC Files Charges in Multi-Million Dollar Fraud Involving Two Companies,” SEC, July 19, 2021.)