This case was last updated from PACER on 09/14/2021 at 08:05:17 (UTC).

Securities and Exchange Commission v. Acosta

Case Summary

On September 13, 2021, the Securities and Exchange Commission (the “Commission” or “Plaintiff”), represented by Stephanie N. Moot, attorney at SEC’s Florida regional office, filed a civil enforcement action against Eliseo Acosta (“Acosta” or “Defendant”), seeking injunctive relief and disgorgement of all ill- gotten gains along with pre-judgement interest for the alleged misrepresentation of Defendant. This case was filed in the U.S. District Court in the District of Puerto Rico.

 

In the complaint Plaintiff alleged that, “From at least 2013 through February 20, 2020 (when the Commission filed an emergency action against Kinetic Group and others), Kinetic Group and its managing member, Michael Scott Williams (“Williams”) raised approximately $39 million from at least 30 investors located primarily in Florida and Puerto Rico. Kinetic Group and Williams represented to investors that Kinetic Funds, and in particular, its largest sub-fund, Kinetic Funds Yield (“KFYIELD”), was conservative and safe, their entire capital would be invested in income producing U.S. listed financial products, and their principal would be secure because the KFYIELD portfolio would be hedged with listed options. In reality, Kinetic Group and Williams diverted a substantial portion of KFYIELD investor capital to KCL Services, LLC d/b/a Lendacy (“Lendacy”), a private, start-up company owned by Williams. Lendacy was neither listed on a U.S. exchange nor capable of being hedged with listed options.”

 

Plaintiff further alleged that, “Sometime in late 2015, Acosta was introduced to Kinetic Group and Williams, and Acosta agreed to solicit investors in Puerto Rico to invest in Kinetic Funds. Pursuant to a “referral agent agreement” entered into by Acosta and Kinetic Group, Kinetic Group paid Acosta 33% of Kinetic Group’s 1% management fee for the first year of the investment in Kinetic Funds securities and 25% of the 1% management fee so long as the investor maintained the investment in Kinetic Funds securities. Kinetic Group provided Acosta with marketing materials that, among other things, described KFYIELD as a liquid, “conservative blended fund,” with 90% principal protection, and stated that “[a]ll [its] products are listed on the U.S. exchanges.” Acosta used these marketing materials to offer and sell Kinetic Funds securities and forwarded them to potential investors, containing these representations.”

 

Plaintiff also alleged that, “From approximately October 2015 to July 2018, Defendant Eliseo Acosta (“Acosta”) acted as an unregistered broker on behalf of Kinetic Funds I, LLC (“Kinetic Funds”) managed by Kinetic Investment Group, LLC (“Kinetic Group”). Acosta raised $22 million for Kinetic Group from the offer and sale of Kinetic Funds securities to two investors located in Puerto Rico. From these sales, Acosta received $105,300 in transaction-based sales commissions. During the time Acosta offered and sold Kinetic Funds securities to investors, he was not registered as a broker-dealer or associated with a registered broker-dealer.”

 

There is only one claim for relief laid down by Plaintiff which deals with the alleged violations of section 15(a)(1) of the Exchange Act.

 

In its prayer for relief Plaintiff has requested the court to issue a permanent injunction enjoining Acosta from violating section 15(a)(1) of the Exchange Act and for an order directing Acosta to disgorge all ill-gotten gains or proceeds received including prejudgment interest. Plaintiff also requested the court for civil money penalty pursuant to section 21(d)(3) of the Exchange Act along with such other and further relief as may be necessary and appropriate.

 

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    3:21-CV-01435

  • Filing Date:

    09/13/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Finance - Security/Commodity/Exchange

 

Party Details

Plaintiff

Securities and Exchange Commission

Defendant

Eliseo Acosta

Attorney/Law Firm Details

Plaintiff Attorney

Stephanie N. Moot

Attorney at United States Securities & Exchange Commission

801 Brickell Avenue, Suite 1950

Miami, FL 33131

 

Court Documents

1 #1

Civil Cover Sheet

#1

(#1) COMPLAINT For Injunctive and Other Relief against Eliseo Acosta, filed by Securities and Exchange Commission. Service due by 12/13/2021, (Attachments: #1 Civil Cover Sheet)(Moot, Stephanie) (Entered: 09/13/2021)

 

Docket Entries

  • 09/13/2021
  • View Court Documents
  • Docket(#1) COMPLAINT For Injunctive and Other Relief against Eliseo Acosta, filed by Securities and Exchange Commission. Service due by 12/13/2021, (Attachments: #1 Civil Cover Sheet)(Moot, Stephanie) (Entered: 09/13/2021)

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