The Receiver is the individual who assumes responsibility for all assets of the entities in receivership in the civil enforcement action brought by the SEC. The Receiver is responsible for determining how the business was operated and where its assets are located. The Receiver also is charged with operating the business and reporting to investors and other interested parties. Ultimately, the Receiver will determine the amounts owed to individual creditors and investors and will distribute available assets in accordance with a plan approved by the Court.
A receiver is appointed by the Court, is not an employee of the Securities and Exchange Commission, and ultimately answers to the Court. In this case, Anthony Box of Gray Reed is the Court-appointed Receiver for the various Receivership Entities.
The Court’s Order governs the authority of the Receiver. Federal courts have specific powers, known as “equitable” powers, to order relief to advance the purposes of the federal securities laws, preserve investor funds, and ensure that wrongdoers do not profit from their unlawful conduct.
Courts may grant broad powers to receivers, including the authority to sue on behalf of the receivership and to gather, manage and liquidate receivership assets on behalf of potential creditors and harmed investors. A receiver is charged with acting in “good faith” and performing his duties with “reasonable diligence.” A receiver is generally required to report to the Court periodically for the property entrusted to him.
It is too soon to determine what will happen to the Receivership Entities. The Receiver is currently exploring various possibilities with respect to the continued operations of the Receivership Entities and has engaged retained personnel who are assisting the Receiver to: (a) review and analyze the financial records of the Receivership Entities; (b) conduct financial analysis and forensic accounting services; and (c) assess the ongoing operations of the Receivership Entities and provide input and guidance regarding the management and oversight of the day-to-day operations of the Receivership Entities, including efforts to collect on accounts receivable and to maximize recovery for investors.
At the appropriate time, the Receiver will submit his recommendations regarding a distribution plan to the Court. Ultimately, the Court will be responsible for considering and approving the Receiver’s proposed plan. The Court must conclude that the proposed plan is fair and reasonable and appropriately protects the interests of the investors in the Receivership Entities.
The Court has entered an Order freezing all assets and funds of the Receivership Entities until the Court authorizes otherwise.
Under the current Receivership Order, the Receiver is only in control of the specific funds and entities that are identified in the list of Receivership Entities:
Nanban Ventures LLC (“Nanban Ventures”)
GSM Eternal LLC, a/k/a NorthStars FinTech (“GSM”)
Himalayan FinTech LLC (“Himalayan”) and
Centum FinTech LLC, a/k/a Sunshines FinTech’s (“Centum”)
The Receiver is currently investigating whether these other investment funds were, in fact, treated as separate and distinct from the Krishnan, et al investment funds and, if so, whether those other investments should be included within the scope of the Receivership. That decision will ultimately need to be addressed with the Court. The Receiver will provide more information regarding this issue as soon as it is available.
It is too soon to determine how much investors will receive from the Receivership Entities. The Receiver is working to protect the assets of the Receivership Entities, but there is no way to predict at this early date how much will be returned to each investor or when that will happen.
Not currently. You are welcome to contact the Receiver’s counsel, however, the Receiver is still setting up a claims process. Once the Court approves that process, you can submit proof of your claims through this website.
Currently, the court has frozen all assets related to the Receivership Defendants. However, the receivership process aims to return as much value as possible to creditors.
Yes, that can be accessed here under important court documents.
No. The Receiver is an agent of the Court and is effectuating the Court’s orders. The Receiver will, however, be investigating potential claims or methods of recovery that he can pursue for the benefit of investors in the Receivership Entities.
The Receiver cannot provide you with legal advice. You certainly have the right to hire or consult with your own lawyer.
At this early stage of the proceedings, we cannot predict how long it will take to complete this process.
The Receiver will post new information on this website from time to time, including Key Court Documents, Receiver Reports, and Important Dates and Deadlines.
Contact information is available here.