This complaint stems from a massive Ponzi scheme allegedly perpetrated, in part, by Emanuel L. Sarris and his investment advisory firm, Sarris Financial Group, Inc. According to the complaint, Sarris convinced more than 70 investors to invest over $30 million in the “Kenzie Funds,” which purportedly invested in foreign currency.
Allegedly, the Kenzie Funds invested less than one-third of investor capital, inflated performance figures, and funded redemption requests with principal from other investors. In total, from 2001 through 2009 the Kenzie Funds defrauded more than 400 investors out of over $100 million. In 2010, the SEC filed a lawsuit against the Kenzie Funds and their manager, Daniel Spitzer, who the court ordered to pay $44 million in disgorgement and prejudgment interest and a $150,000 civil penalty. Spitzer was later indicted on multiple counts of criminal fraud for his involvement in the scheme.