On October 13, 2015 the Securities and Exchange Commission announced that the initial decision of the administrative law judge with respect to Khaled Eldaher was declared effective. The initial decision ordered Khaled Eldaher to cease and desist from committing or causing violations of Section 15(a)(1)of the Exchange Act and also required that Khaled Eldaher disgorge $15,478. The order stems from a proceeding brought by the SEC against Eldaher accusing him of violations while he was associated with ACAP Financial Inc. a registered broker-dealer, based in Salt Lake City.
According to the SEC’s initial decision, in April 2012 Khaled Eldaher began communication with Efstratios “Elias” D. Argyropoulos, the President of Prima Capital Group. Argyropoulos claimed that Prima Capital was offering an opportunity to invest in pre-IPO Facebook shares through a secondary market created by Facebook employees, advisors, and contractors who had held an equity stake in the company and wanted to sell their shares before Facebook’s upcoming IPO.
Eldaher referred twelve investors to Prima Capital, who purchased Facebook shares for $362,887.52. Eldaher acknowledged in the SEC proceeding that he engaged in “selling away” in referring his clients to Prima Capital. The SEC decision ordered that pursuant to Section 15(b)(6) of the Exchange Act, Khaled Eldaher is suspended for six months from being associated with a broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization or from participating in an offering of penny stock.
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