This week, it was announced that the SEC had charged three-time recidivist Steven J. Muehler with operating an unregistered broker-dealer, facilitating an unregistered securities offering and defrauding small businesses. The companies controlled by Muehler, his wife, Claudia M. Muehler, and an associate, Koorosh “Danny” Rahimi, were also charged. The Securities and Exchange Commission is also seeking a preliminary injunction to prevent Muehler from continuing to violate securities laws.
The SEC’s complaint charges Muehler with violating a cease-and-desist order issued in 2016 barring the defendant from associating with any broker-dealer. The complaint explains that Muehler’s companies are not registered as broker-dealers. Nevertheless, since at least November of 2015, Muehler and the companies have agreed to provide broker-dealer services to more than 20 small businesses. In return, Muehler and his companies received fees, the right to an equity stake in each small business customer, and the right to a percentage of any funds raised from the investors.
The SEC also alleges that Muehler and his companies made various fraudulent claims to potential clients. The SEC accuses Claudia Muehler and Danny Rahimi of helping Muehler carry out the scheme. Additional details have been made available here.