SEC Charges CEO and His Venture Capital Firm in $6 Million Fraudulent Offering

SEC Investor News

The Securities and Exchange Commission charged CEO George Iakovou and his venture capital firm, Vika Ventures LLC, with fraudulently offering and selling more than $6 million of securities to at least 46 individual investors in multiple states including California, Georgia, and New York. The SEC also announced settled charges against Penelope Zbravos for her role in Vika Ventures.

The SEC's complaint alleges that, between late 2019 and 2021, Iakovou and Vika Ventures offered to sell investors shares of private companies that might hold an initial public offering. However, as set forth in the SEC's complaint, Iakovou and Vika Ventures did not own the shares at the time of the solicitations and never acquired them. Rather than purchasing the securities, Iakovou allegedly used investor funds for himself. As CEO of Vika Ventures, Iakovou allegedly used fraudulent documentation and statements to convince investors that Vika Ventures was a successful venture capital firm. According to the SEC's complaint, Zbravos, Iakovou's then-girlfriend, encountered sufficient red flags regarding the company's operations to make her a negligent participant in Vika Ventures.

The complaint, filed in the United States District Court for the Middle District of Georgia, charges Iakovou and Vika Ventures with violations of Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Exchange Act Rule 10b-5 and charges Zbravos with violating Section 17(a)(3) of the Securities Act. The SEC seeks permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties against Iakovou and Zbravos and an officer and director bar against Iakovou. The complaint seeks permanent injunctive relief and a civil penalty against Vika Ventures.

Without admitting or denying the allegations in the complaint, Zbravos has agreed to a permanent injunction from future violations of Section 17(a)(3) and to pay disgorgement, prejudgment interest, and a civil penalty, as determined by the district court. The settlement is subject to the approval of the district court.

In a parallel action, the U.S. Attorney's Office for the Middle District of Georgia, filed related criminal charges.

The SEC's investigation was conducted by Allison M. Rochford and Michelle I. Bougdanos and supervised by David Frohlich and Carolyn Welshhans. The litigation will be led by James Carlson. The SEC appreciates the assistance of the U.S. Attorney's Office for the Middle District of Georgia and the United States Secret Service, Albany, Georgia Office.

Read the original litigation release from the U.S. Securities and Exchange Commission here.

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