June 15, 2024

Siddharth Jawahar, an Indian-American financial advisor, is facing allegations of orchestrating a multi-million dollar Ponzi scheme according to the United States Attorney’s Office in Missouri.

Introduction to Siddharth Jawahar

Originating from Texas, Siddharth Jawahar was previously employed at Morgan Stanley before branching out to start his own investment firm, namely, Swiftarc Capital LLC situated in Austin, Texas. This information is corroborated by the US Attorney’s Office and CrunchBase, revealing that he ascended to the rank of Managing Partner and eventually became SwiftArc’s founder.

The Unraveling of Swiftarc’s Investment Strategy

As the US Attorney’s Office in Missouri explains, Siddharth’s firm initially distributed its investments across several securities. However, a significant shift occurred in 2015 when Siddharth started channeling the majority of his clients’ funds into a single security, Philip Morris Pakistan (PMP), until it constituted 99% of Swiftarc Fund’s investments by 2019.

Documentation from the Texas State Securities Board, released in June 2022, revealed that Swiftarc assured investors that PMP’s share value was approximately Rs. 4,000 per share. However, the share price experienced a steady decline, going from Rs. 3,230 per share in September 2019 to Rs. 1,760 per share in May 2020. Moreover, on May 25, 2022, PMP’s trading price was only Rs. 541 per share.

The US Attorney’s Office declared that Siddharth failed to keep his investors informed about the substantial decrease in PMP’s value. Instead, he allegedly misrepresented the facts, leading his clients to believe that the shares were trading at much higher prices and thus that their investments were more profitable than they truly were.

Festive offer

The indictment against Jawahar includes accusations of deceptive practices. It is alleged that he tricked certain investors in eastern Missouri by assuring them that their collective investments worth $175,000 would be injected into specific companies. Similar false assurances were allegedly made to a New York investor about $350,000, and to an Ohio investor about $250,000, according to the indictment.

Swiftarc’s Demise and Jawahar’s Continued Activities

Jawahar’s case gained public attention when the Texas State Securities Board issued an order revoking Swiftarc Capital’s investment advisor registration on June 7, 2022. The order also directed Jawahar to halt all fraudulent activities immediately.

Despite this, the indictment alleges that Jawahar did not inform his clients of the cease-and-desist order and continued to operate as usual, soliciting money from them. In fact, he reportedly accepted $1 million from an investor mere weeks after the state board’s order was issued.

Published by IE Online Media Services Pvt Ltd.

Initial Publication: March 14, 2024 at 16:16 IST