SEC v. Shervin Neman and Neman Financial, Inc. (ponzi schemes, 2016)

Judgment entered

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In November 2016 the SEC opened follow-on proceedings against Los Angeles adviser Shervin Neman and Neman Financial, Inc. after a federal court injunction in a case over an alleged Ponzi scheme. On November 20, 2017 an administrative law judge granted summary disposition, barring Neman from the industry and revoking the firm's adviser registration. Neman had been sentenced to 135 months in a criminal case.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

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Total relief

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Alleged gain

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A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars.

What is alleged to have happened

The order instituting proceedings, issued November 29, 2016, recites that the 2012 civil complaint alleged the two operated a Ponzi scheme, using new investor funds to pay principal and profits to existing investors, in foreclosed property, pre-IPO share and other investments. It rests on a November 16, 2016 federal court injunction against both respondents; it made allegations and imposed no sanction by itself.

Outcome. On November 20, 2017 an SEC administrative law judge granted the Division of Enforcement's motion for summary disposition, because the respondents did not file a compliant response. The decision bars Neman from associating with an investment adviser, broker, dealer, municipal securities dealer, municipal advisor, transfer agent or rating organization, and revokes Neman Financial's registration as an investment adviser. The decision also records that a jury convicted Neman of three counts of mail and wire fraud in 2014 and that he was sentenced in February 2015 to 135 months in prison with restitution of more than $3.25 million. Those criminal facts come from the decision, which relies on them as established; no money penalty was imposed in the administrative proceeding.

What the source does not show: the document says the initial decision becomes final only on a Commission order of finality, and we did not find or check that order, so the bars may have taken effect later or on a different date.

This library tags the matter as ponzi schemes because the document describes payments to earlier participants made from later participants' money. The tagging is ours, not the regulator's: agencies charge statutory provisions, not technique names.

What technique is this, and how does it work?

This action is tagged with one technique in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• Ponzi schemes — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2016-11-29 Administrative proceeding instituted (administrative)
2. 2017-11-20 Administrative law judge's initial decision bars Neman and revokes Neman Financial's registration

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• SEC order
• SEC initial decision (Nov. 20, 2017)

The linked release is a work of the United States government and is not subject to copyright. Our summary and narrative above are our own writing.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added September 10, 2026. submit a correction.