The Securities and Exchange Commission has charged New York’s Vika Ventures and its CEO and co-founder, George Iakovou, 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 commission said it also settled charges against Vika Ventures’ other co-founder, Penelope Zbravos – Iakovou’s then-girlfriend – for her role in the scheme.
“Without admitting or denying the allegations, Zbravos has agreed to a permanent injunction from future violations and to pay disgorgement, prejudgment interest, and a civil penalty, as determined by the district court,” the SEC said in a statement. “The settlement is subject to the approval of the district court.”
Venture Capital Journal sent the firm an email seeking comment but had not heard back as of press time.
The SEC 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.
Vika’s website, which was still active as of December 8, states that the firm’s previous investments include Airbnb, Impossible Foods, Palantir Technologies, Snowflake, SpaceX and Wish. VCJ was unable to verify if that claim is true.
However, according to details of the 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.”
Further, the SEC contends that Zbravos “encountered but failed to act upon sufficient red flags regarding the company’s operations to make her a negligent participant in the scheme.”
“Iakovou and Vika Ventures allegedly operated a straightforward fraud on investors by offering to sell them securities in highly sought-after pre-IPO companies without ever intending to buy any shares on behalf of the investors,” associate director of the SEC enforcement division Carolyn M. Welshans said in a statement. “Instead, Iakovou allegedly spent millions of dollars on private jets, expensive watches, and lavish travel. This case underscores our commitment to pursuing those that prey on investors by using fake company profiles, misleading websites, and false promises of lucrative pricing of securities.”
The complaint, filed in the United States District Court for the Middle District of Georgia, charges Iakovou, Vika Ventures and Zbravos with violating the antifraud provisions of the federal securities laws. The SEC seeks permanent injunctive relief, disgorgement with prejudgment interest and civil penalties against Iakovou and Zbravos. The complaint seeks permanent injunctive relief and a civil penalty against Vika Ventures.