SEC charges two men over alleged $8.7 million options-fund fraud aimed at veterans

The US Securities and Exchange Commission announced charges on 30 September 2026 against Christopher Kenji Dinelli and Jacob David Frankel, alleging they ran a fraud that raised more than $8.7 million from 35 investors through a fund, Beyond Alpha Ventures LLC, and an advisory firm, Beyond Equity LLC. The case is at the complaint stage.

What the SEC alleges

According to the complaint, Dinelli, a former naval officer, targeted veterans and people who provide medical services to veterans. Investors were told their money would go into the Beyond Alpha Ventures fund, presented as running an options trading strategy, or into affiliated special purpose vehicles said to hold pre-IPO shares in two private companies.

The SEC alleges the pair repeatedly misrepresented the fund’s past performance, its assets under management, its client base and its holdings. Although the fund was consistently losing money, they allegedly kept advertising returns of up to 153%, including a claimed 153% net return on investment in a document titled Trading Fund Overview 2024.

The complaint also alleges that money from pre-IPO investors was moved, without their knowledge, into the fund’s brokerage accounts, where most of it was lost on failed options trades. Dinelli is alleged to have misappropriated over $1 million and Frankel over $340,000.

“Through their alleged actions, the defendants took advantage of those relationships for greedy and self-serving purposes,” said Thomas P. Smith, Jr., Associate Director of the SEC’s New York Regional Office.

Charges and parallel case

The complaint, filed in the US District Court for the Southern District of New York, charges both men under the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, and Frankel additionally under the Investment Advisers Act of 1940. The SEC is seeking permanent injunctions, disgorgement with prejudgment interest and civil penalties. The US Attorney’s Office for the Southern District of New York has brought parallel criminal charges over the same conduct.

What it means for traders

A trading fund’s own performance sheet is not evidence of its results. Before investing with a manager who advertises options returns, check that the firm and the individuals are registered and ask how the figures were produced and who verified them; our guide on how to check a broker licence explains where to look.