SEC Adds Misappropriation to Sports Advisor Ash Narayan's Fraud Charge in Amended Complaint

Attorney Advertising Disclaimer

After originally charging Ash Narayan of Newport Coast, California and The Ticket Reserve, Inc. in a multi-million dollar fraud scheme targeting prominent sports stars that investigators say resembled a Ponzi scheme, the SEC in January amended its complaint, adding misappropriation to the laundry list of charges against the former RGT Capital Management financial adviser and his co-defendants.

SEC Amended Complaint #3:16-cv-01417-M

In 2016, SEC officials first filed a complaint against Narayan, who served as managing director for RGT Capital in Irvine, alleging that he and co-defendants Richard M Harmon (CEO of The Ticket Reserve, Inc) and John A Kaptrosky (COO) used The Ticket Reserve in a scheme to deceive and defraud investors, transferring over $33 million from clients' accounts to The Ticket Reserve, often without the clients' knowledge or consent.

SEC officials alleged Narayan sometimes effected these transfers by using forged or copied signatures, and then created fraudulent documents, sometimes backdated, in order to further the fraudulent scheme, conceal the misconduct, and avoid detection.

Narayan and the other defendants also purportedly misrepresented to several conservative risk-averse clients that The Ticket Reserve was a profitable company and a good investment when, in reality, it posed a considerable risk to investors and was in dire financial condition.

For instance, The Ticket Reserve included in its private placement memorandum several false and/or misleading claims about its performance based on financial statistics associated with college football's National Championship, the Sugar Bowl, and Major League Baseball's postseason market.

Investigators alleged that the defendants "knew that all of the positive statements regarding TTR's financial condition were false or misleading."

NFL QB Mark Sanchez, MLB pitcher Jake Peavy, and Roy Oswalt comprised some of The Ticket Reserve clientele, according to one report. Combined, the three reportedly lost over $30 million through their dealings with Narayan.

According to another report, Narayan was on a list of the NFL Players Association's "approved" financial advisers. The NFLPA subsequently issued a fraud alert for Narayan and removed him from its list.

The same report alleges that Peavy had never even heard of The Ticket Reserve, much less authorized Narayan to invest in it.

Though the 2016 complaint alleged that The Ticket Reserve made Ponzi-like payments to existing investors using money from newer investors in order to keep its failing business afloat, the 2018 amended complaint clarified that Narayan and Harmon misappropriated approximately $2.4 million from these customers, obscuring the misappropriation by mischaracterizing finder's fees as "director's fees" or "loans."

The findings also state that the defendants leased a condominium in Palm Springs, CA, and another in Austin, Texas, using misappropriated funds in the name of The Ticket Reserve, although, "this arrangement had no legitimate business purpose."

The 2016 complaint had stopped short of characterizing the sham promissory note and "director's fee" payments as misappropriation.

The SEC kept other charges—such as Narayan's use of fake, forged, or copied signatures, and his failure to disclose to clients a conflict-of-interest that he served on The Ticket Reserve's Board of Directors—unchanged in its amended complaint.

If you have invested with former RGT Capital Management (Irvine, CA) financial adviser Ash Narayan or with another representative or broker in a fraudulent Ponzi-like scheme, or have experienced unauthorized transactions or misappropriation of funds that have proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.