In a final court judgment, the U.S. Securities and Exchange Commission (SEC) resolved its enforcement action against a former registered rep that allegedly induced his clients to invest in a non-existent private equity fund.
The SEC obtained a final judgment against Rajesh Markan — a former rep with Merrill Lynch from 2009 to 2022, and with Hilltop Securities Inc. from 2022 to 2024 — which imposed permanent injunctions against him and ordered US$2.45 million in disgorgement and interest, to resolve allegations that he breached securities rules by raising money from investors for a fake investment fund.
Back in June 2025, Markan agreed to settle the SEC’s charges against him, without admitting or denying the regulator’s allegations. At the time, they reached a bifurcated settlement, with monetary remedies to be determined at a future date.
In the meantime, in a parallel criminal case, Markan pled guilty to one count of securities fraud and was sentenced to four years in prison — he was also ordered to pay US$2.45 million in restitution.
According to the SEC’s complaint, between 2015 and mid-2024, Markan solicited his brokerage customers to invest approximately US$2.9 million in a purported private equity fund that, he said, would deliver strong returns, but would tie up their money for between six and 12 years.
However, the regulator alleged that the fund was non-existent, and that Markan misappropriated most of the investors’ money.
The scheme was uncovered when investors contacted Bain Capital, the fake fund’s purported fund manager, in 2024. At that point, most of investors’ money had been spent.
The payment of the disgorgement ordered by the SEC is deemed satisfied by the restitution ordered against Markan in the criminal case.