SEC Wins Default Against Absent Bay Area Exec

SAN FRANCISCO (CN) - A Bay Area executive accused of reselling $900,000 in stock already sold to other investors never responded to the government's complaint against him, leading to a default judgment against him on Tuesday.

The Securities and Exchange Commission sued Vinay Kumar Nevatia, a former Palo Alto executive and owner of "several now-defunct investment entities," in December 2014.

Kumar and his eight aliases were the only defendants in the lawsuit.

The SEC says Kumar first raised money from investors to buy shares of privately held CSS Corp. Technologies. Three years later, he resold those shares "which belonged to the original investors" without telling them the complaint said.

Kumar "went to great effort to conceal his double dealing," the SEC said.

"He lied to CSS's transfer agent, saying that new stock certificates should be issued to the new buyers and that the original stock certificates had been lost," the complaint said.

After fraudulently selling their shares, Kumar then deceived the original investors into believing they still owned the stock as he absconded with $900,000 in proceeds, according to the SEC.

The SEC asked the court for disgorgement, penalties and an injunction.

A court summons and copy of the complaint were delivered to Kumar on Feb. 9 through the Dubai Customs Holding Center in Dubai, United Arab Emirates, where Kumar was being held on unrelated charges.

However, Kumar never responded to the complaint, according to the SEC's motion for default judgment filed on July 17.

Kumar, 46, lived in Palo Alto from 2004 until 2013, the SEC said. His businesses included KBR Capital Markets, LLC; KBR Capital Partners, Inc.; KBR Capital Partners, LLC; and KBR Fund, LP, which he operated out of offices in San Mateo County and his home.

Kumar could not be reached for comment, and the SEC did not immediately return a request for comment.

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