The Securities and Exchange Commission (SEC) just filed an emergency enforcement action seeking an asset freeze and other immediate relief against Zachary Horwitz, an actor based out of Los Angeles, California, and his company, 1inMM (one in a million) Capital, LLC. In its lawsuit, the SEC alleged that Horwitz and his company were engaged in an ongoing Ponzi scheme that raised in excess of $690 million.
The SEC contends that Horwitz represented to investors that they were purchasing film rights with the plan to resell them to HBO and Netflix, yet no business relationship with these companies actually existed. Per the SEC’s Complaint, Horwitz touted an established history of profitably selling movie rights to Netflix and HBO when, in truth, neither he nor his company had ever done so. As a means to entice investment with promised returns exceeding 35%, Horwitz presented investors with fabricated contracts and emails purportedly evidencing contracts with Netflix and HBO, per the SEC’s allegations. In classic Ponzi Scheme fashion, Horwitz is further alleged by the SEC to have paid “returns” on earlier investments by utilizing capital from new investors, and to have misappropriated investor capital for his personal use, including buying an expensive home and outings to Las Vegas.
The SEC charged Horwitz and 1inMM with violations of the fraud provisions of the federal securities laws, and obtained an asset freeze. The SEC’s enforcement action also seeks disgorgement, a permanent injunction and civil penalties.
In its litigation release announcing the filing of this action, the SEC provides, in essence, a “thank you” to the US Attorney’s Office for the Central District of California and the FBI for their assistance. An ominous sign for sure, and perhaps the final curtain in this act.
David Chase, Esq. is an SEC defense attorney, former SEC Prosecutor and an Adjunct Professor of Law at the University of Miami School of Law where he teaches SEC Regulation. His SEC defense law firm, based in South Florida, represents nationwide those under SEC investigation and prosecution. Mr. Chase may be contacted toll-free at: 800-760-0912, or email at email@example.com. Firm website: securitiesfrauddefense.net.