SEC Charges Texas-Based Company and Founders with Defrauding Dozens of Investors

Securities and Exchange Commission, SEC charges Christian Kranenberg, Sebastian Silea, and their company, KS Cartel with fraud involving $1.1 million

(STL.News) The Securities and Exchange Commission (SEC) charged Texas residents Christian Kranenberg and Sebastian Silea, and their company KS Cartel, with defrauding dozens of investors out of $1.1 million through a fraudulent and unregistered securities offering.

The SEC’s complaint alleges that Kranenberg and Silea falsely held themselves out to prospective investors as highly qualified business and industry professionals with a history of successful trading.  According to the complaint, KS Cartel, Kranenberg, and Silea falsely guaranteed that investors would lose no more than 50 percent of their initial investment, and claimed, without any reasonable basis, that investors should expect monthly returns of 20-30 percent.  The complaint alleges that they provided investors phony account statements depicting profitable trading.  The complaint further alleges that Kranenberg, Silea, and KS Cartel used only a fraction of investor funds for trading and instead used most of the funds on personal expenditures and for payments of purported profits to investors.

The SEC’s complaint, filed in the U.S. District Court for the Eastern District of Texas, alleges that Kranenberg, Silea, and KS Cartel violated the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933, and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.  The SEC seeks injunctive relief, disgorgement plus prejudgment interest, and civil penalties.

The SEC’s investigation was conducted by Kendrea Tannis and Melvin Warren under the supervision of Scott Mascianica and Eric Werner of the Fort Worth Regional Office.  The SEC’s litigation will be led by Nikolay Vydashenko and Ms. Tannis under the supervision of B. David Fraser.

%d bloggers like this: