Who is Siddharth Jawahar, the Indian-American indicted in a Ponzi scheme in US?

What went wrong?

According to the US Attorney’s Office in Missouri, Swiftarc had spread out investments across a variety of securities initially, as is practice. However, starting in 2015, Jawahar began investing majority of its clients’ funds in one security named Philip Morris Pakistan (PMP) until 2019, when 99% of Swiftarc Fund’s investments were in PMP.

The Texas State Securities Board, in a statement issued in June 2022, said that Swiftarc told investors that the PMP shares are worth Rs. 4,000 per share. Over time, the price of the share fell from Rs. 3,230 per share in September 2019 to Rs. 1,760 per share in May 2020, it said, adding that as of May 25, 2022, PMP was trading at a price of Rs. 541.

“Jawahar did not inform investors of a dramatic decline of the value of PMP, instead falsely representing to investors that shares were trading at a much higher price, it says, and misleading investors about their profits,” said the US Attorney’s Office’s statement.

“The indictment accuses Jawahar of misleading someone in eastern Missouri into believing that a series of investments totalling $175,000 would go into specific companies. A New York investor was told the same about $350,000 and an Ohio investor heard the same about $250,000, the indictment says,” it added.

Jawahar’s name hit the news when, on June 7, 2022, the Texas State Securities Board issued an order revoking Swiftarc Capital’s investment adviser registration and ordering Jawahar “to cease and desist from engaging in fraud”.

The office, quoting the indictment document, alleged that Jawahar did not let his clients know of the cease-and-desist order. Instead, he continued to take their money, including $1 million from an investor weeks after the state board’s order.