The U.S. Securities and Exchange Commission filed a fraud complaint on September 3 against Omar Dario Chavez, a Southern California resident accused of running a fake trading operation that took more than $940,000 from at least 16 clients, several of them elderly. The complaint, filed in the Central District of California, alleges Chavez promised clients monthly returns of 10 to 20 percent and personally guaranteed their money with $1 million to $2 million in assets he did not actually hold. Between October 2022 and March 2025, according to the agency, he sent clients fabricated monthly profit statements while his actual trading lost hundreds of thousands of dollars.
A Guarantee Backed by Assets That Did Not Exist
According to the complaint, Chavez told prospective clients he was averaging monthly returns of 10 to 20 percent through his own securities trading, a pace that would be extraordinary even for a top professional sustained over a full market cycle. To make the pitch credible, he claimed to personally guarantee the return of client money with $1 million to $2 million in assets held outside the trading accounts, assets the complaint says he never actually owned. That guarantee, more than the return figures themselves, is what the SEC says persuaded wary clients to hand over increasingly large sums between October 2022 and March 2025.
The complaint alleges Chavez sustained the story by sending clients monthly statements reporting fabricated profits, even as his actual trading results moved in the opposite direction. Rather than compounding gains, the SEC says he lost hundreds of thousands of dollars in the market during the same stretch he was reporting steady double-digit monthly wins on paper. The fabricated statements did more than mask the losses: the agency alleges they induced existing clients to add fresh money, deepening exposure to a trading record that did not exist.
Some of that new client money, according to the complaint, went to pay earlier clients, a pattern regulators describe as one of the clearest markers separating a struggling trading business from a fraud that uses new deposits to cover old promises. The SEC also alleges Chavez diverted client funds directly to his own rent, credit card bills and repayment of short-term personal loans, spending unrelated to any trading strategy and, the complaint says, undisclosed to the clients whose money covered it.
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Charges Under Two Federal Securities Laws
The SEC filed its complaint on September 3 in the U.S. District Court for the Central District of California, case number 2:26-cv-09887, charging Chavez with violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, along with Section 17(a) of the Securities Act of 1933 and Sections 206(1) and (2) of the Investment Advisers Act of 1940. Those advisers-act provisions apply to anyone acting as an investment adviser regardless of formal registration status, and they prohibit exactly the kind of misrepresentation and self-dealing described in the complaint.
The agency is asking the court for permanent injunctive relief barring Chavez from further securities violations, disgorgement of his allegedly ill-gotten gains with prejudgment interest, and a civil penalty. None of those remedies has been ordered. The case remains an active civil enforcement matter, and the size of any disgorgement or penalty depends on what the court finds after Chavez has an opportunity to respond; the SEC’s release frames every element of the scheme as an allegation, not an established fact, pending that outcome.
The SEC’s Los Angeles Regional Office investigated the matter, with staff members Colleen Keating and Dora Zaldivar handling the investigation under the supervision of Diana Tani and Brent Wilner; Donald Searles will lead the litigation under Stephen Kam. The agency credited the U.S. Attorney’s Office for the Central District of California and the Federal Bureau of Investigation with providing assistance, a level of interagency detail the release includes without stating whether either agency is pursuing a separate action of its own.
How Regulators Tell Older Investors to Check Before They Invest
The SEC’s Office of Investor Education and Advocacy has separately flagged the exact pattern described in the Chavez complaint as one of the clearest signs of investment fraud: a guaranteed or unusually high return promised with little or no risk. An investor alert aimed at identifying fraud against older investors lists repeated requests for additional money from the same person, unexplained account withdrawals, and salespeople who turn out not to be properly licensed among the signs that an investment relationship has turned into a scheme.
That same office maintains a free search tool at Investor.gov that lets anyone confirm whether a person offering to manage money is actually registered with state or federal securities regulators before a dollar changes hands. The complaint against Chavez does not state whether he was registered as an investment adviser at the time he was soliciting the clients named in the case, and the SEC’s litigation release does not address that question directly.
For victims and their families, the same guidance points to FINRA’s Securities Helpline for Seniors and the North American Securities Administrators Association’s state-regulator network as channels for reporting a suspected case once a pattern like fabricated statements or an outsized guarantee has already emerged. Those reporting paths exist because, per the SEC’s own alert, perpetrators of this kind of fraud frequently target the same victims more than once, a risk that remains open for the clients named in the Chavez complaint no matter how the civil case against him concludes.
This article was produced with AI assistance and reviewed by The Money Overview editorial team.
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