The operators of an unregistered firm that promised high returns from options trading and pre-IPO securities defrauded investors, U.S. authorities allege.
On Wednesday, the U.S. Securities and Exchange Commission (SEC) filed a complaint against Christopher Kenji Dinelli and Jacob David “Kobe” Frankel, alleging that they defrauded investors in their fund, Beyond Alpha Ventures LLC, and through their advisory firm, Beyond Equity LLC, by misleading investors about the fund’s track record and misusing investors’ money in failed options trades, rather than investing it as promised.
According to the regulator’s complaint, which was filed in the U.S. district court for the Southern District of New York (SDNY), between April 2024 and February 2026, the fund raised over US$8.7 million from investors, promising returns from its successful options trading strategy, and through interests in affiliated special purpose vehicles (SPVs) that purported to hold pre-IPO securities.
However, the SEC alleged that investors were misled with claims that the fund produced high returns, when it actually suffered persistent trading losses.
It also alleged that they diverted investors’ money that was supposed to be used to acquire pre-IPO securities to more failed options trades. And, the complaint alleges that Dinelli also misappropriated over US$1 million, and that Frankel misappropriated over US$340,000, for various personal uses.
In a parallel criminal proceeding in the SDNY, the two men were also charged with securities fraud, wire fraud, and conspiracy to commit securities fraud and wire fraud, and Frankel was charged with investment advisor fraud and making false reports to the SEC.
The SEC is seeking permanent injunctions, disgorgement and civil penalties against both defendants.
None of the allegations have been proven.