The case of the day is Securities and Exchange Commission v. Kumar (N.D. Cal. 2015). The complaint alleged that Vinay Kumar Nevatia, who lived in Palo Alto between 2004 and 2013, solicited investments in shares of CSS Corp. Technologies (Mauritius) Ltd., even though he was not registered with the SEC. Kumar formed a company called VRSBS Investment, LLC, to hold the shares of CSS that he and his investors purchased. Each investor received a stock certificate, presumably registered to VRSBS Investment, if I understand the situation correctly, for his or her portion of the total investment. However, according to the SEC, Kumar later made an agreement to sell half VRSBS’s CSS shares to a venture capital firm. The proceeds of the sale were deposited in his personal bank account rather than in VRSBS’s account. When the venture capitalists requested stock certificates, according to the SEC, Kumar “falsely claimed that new certificates needed to be issued because all his CSS shares were held on a single certificate, which covered a greater number of shares then the [VCs] had purchased.” Kumar tried to get certificates, but CSS’s transfer agent told him he needed to return the original certificates for cancelation. Kumar, again according to the SEC, “falsely told the transfer agent … that all of the original stock certificates issued to VRSBS had been lost,” when in fact the investors were holding the certificates. After Kumar agreed to indemnify the transfer agent, the transfer agent issued the new certificates. Kumar, according to the SEC, never told his original investors about the sale or the proceeds of the sale. Yikes!