SEC settles with estate of fund manager accused of losing investors' money trading

The US Securities and Exchange Commission (SEC) filed settled fraud charges on 19 October 2026 against the estate of Chirayu Vijay Patel, a fund manager it says misled more than 40 investors and misappropriated their money. The SEC announced the case on 20 October. Mr Patel has died; the case was brought against Siddhi Patel as administrator of his estate.

What the SEC alleges

According to the complaint, filed in the US District Court for the District of New Jersey, Mr Patel solicited money through two offerings. One promised investors fixed returns of 6% a year; the other was presented as higher risk, with target returns of 20% a year.

The SEC alleges that between around July 2020 and November 2025 he pooled about $10 million from investors. Of that, it says, about $1.2 million went on personal expenses, about $1.5 million was returned to some investors as Ponzi-like payments, and more than $7 million was lost through trading.

The complaint also alleges that Mr Patel repeatedly sent investors false account statements and false rates of return, so they believed he was making profits when he had in fact lost or misappropriated nearly all of their money. The SEC charges violations of the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.

The settlement

Without admitting the allegations, the estate’s administrator consented to a final judgment, which is subject to court approval. It would order the estate to pay disgorgement of $1,204,597.77 plus prejudgment interest of $198,497.46.

What it means for investors

The pattern alleged here is a familiar one: a fixed or target return, statements that show steady profits, and early investors paid with later investors’ money while the trading itself loses. An account statement produced by the manager is not independent evidence that the money exists. Before handing money to anyone to trade on your behalf, check their registration and who holds the assets; our guide on how to check a broker’s licence explains where to look.

What happens next

The proposed final judgment now goes to the court for approval.