SEC v. Gopala Krishnan; Manivannan Shanmugam; Sakthivel Palani Gounder; Nanban Ventures LLC; GSM Eternal LLC; Himalayan Fintech LLC, et al., No. 4:23-cv-885, Eastern District of Texas (Apr. 16, 2021) — Complaint

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION

SECURITIES AND EXCHANGE COMMISSION,

                                              Plaintiff,        FILED UNDER SEAL

v.        C.A. No.:

GOPALA KRISHNAN, MANIVANNAN
SHANMUGAM, SAKTHIVEL PALANI
GOUNDER, NANBAN VENTURES LLC,
GSM ETERNAL LLC (A/K/A NORTHSTARS
FINTECH), HIMALAYAN FINTECH LLC,
and CENTUM FINTECH LLC (A/K/A
SUNSHINES FINTECH),
       Jury Trial Demanded

                                              Defendants.

COMPLAINT
Plaintiff Securities and Exchange Commission (“SEC”) files this Complaint against
Defendants Gopala Krishnan (“Krishnan”), Manivannan Shanmugam (“Shanmugam”), Sakthivel
Palani Gounder (“Gounder”), Nanban Ventures LLC (“Nanban Ventures”), GSM Eternal LLC,
a/k/a NorthStars FinTech (“GSM”), Himalayan Fintech LLC, (“Himalayan”), and Centum
FinTech LLC, a/k/a Sunshines FinTech (“Centum”) (collectively, “Defendants”).
I.  SUMMARY OF THE ACTION
1. From at least April 16, 2021 to the present, Krishnan, Shanmugam, and Gounder
(“Founders”), acting through their controlled “Nanban” companies, have raised at least
approximately $129.7 million from over 360 investors in fraudulent securities offerings targeting
members of the Indian community in the DFW-area, including approximately $89.8 million for
five “Nanban” branded private investment funds that Nanban Ventures offered to retail investors,

4:23-cv-885 SDJ

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and $39.9 million from selling high-yield promissory notes to so-called “friends and family”
investors through GSM, Himalayan, and Centum (“Founder Companies”).
2. To raise additional investments and keep their fraudulent enterprise afloat, the
Defendants have been overstating the profitability of the investments and paying investors and
themselves millions of dollars in fake profits using, in substantial part, other investor funds
(“Ponzi payments”).
3. To raise investor funds in the first instance, Defendants made multiple
misrepresentations and omissions to investors.  Defendants told the fund and note investors that
they would invest their money using “GK Strategies,” which Krishnan (who goes by “GK”)
falsely claimed is a proprietary options trading method that never loses money and outperforms
the stock market.  In reality, Krishnan and the other Founders grossly misrepresented the nature
and performance of GK Strategies to lure investors.
4. Defendants also misrepresented the funds’ investments and concealed conflicts of
interest.  Defendants told investors that the funds would trade using GK Strategies and also
invest in start-up technology companies and real estate.  Nanban Ventures then provided fund
investors a statement of investments purporting to show that most of the funds’ assets were
invested in three “fintech” companies.  “Fintech” refers to companies that use technology to
improve financial services.  But here, the so called “fintech” companies were actually the
Founder Companies, which are simply other “Nanban” companies that the Founders control and
disguised to appear as third-party fintech companies.
5. In fact, Nanban Ventures and the Founders did not invest the majority of the
funds’ assets as represented.  Instead, they purportedly invested most of the assets in unsecured
promissory notes issued by the related-party Founder Companies – companies that are not

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engaged in fintech business and have little or no assets other than investor funds or assets
purchased with investor funds.
6. Nanban Ventures and the Founders also acted as investment advisers to the funds,
and, therefore, owed a fiduciary duty to the funds.  They blatantly breached this duty by putting
the Founders’ interests ahead of the funds’ interests, engaging in and profiting from undisclosed
conflicts of interest, and misusing fund assets in a manner that was inconsistent with the fund
documents, including by entering into the related-party notes and taking excess compensation.
7. By their misconduct, Defendants violated the antifraud provisions of the federal
securities laws.  The SEC brings this action seeking injunctive relief, disgorgement of ill-gotten
gains plus prejudgment interest, civil penalties, officer and director bars, and all other equitable
and ancillary relief the Court deems just and proper.
II.  JURISDICTION AND VENUE
8. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d), and
22(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77t(b), 77t(d), and 77v(a)],
Sections 21(d), 21(e), and 27(a) of the Securities Exchange Act of 1934 (“Exchange Act”) [15
U.S.C. §§ 78u(d), 78u(e), and 78aa(a)], and Sections 209(d) and 214 of the Investment Advisers
Act of 1940 (“Advisers Act”) [15 U.S.C. §§ 80b-9(d) & 80b-14].
9. The limited-partnership units and investment notes offered, purchased, and sold,
as alleged herein, are securities under Section 2(a)(1) of the Securities Act [15 U.S.C. § 77b] and
Section 3(a)(10) of the Exchange Act [15 U.S.C. § 78c].
10. Defendants, directly or indirectly, made use of the means or instrumentalities of
interstate commerce, the means or instruments of transportation or communication in interstate

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commerce, and the mails in connection with the transactions, acts, practices, and/or courses of
business alleged herein.
11. Venue is proper in this district pursuant to Section 22(a) of the Securities Act [15
U.S.C. § 77v(a)], Section 27(a) of the Exchange Act [15 U.S.C. § 78aa(a)], and Section 214 of
the Advisers Act [15 U.S.C. § 80b-14].  Certain of the transactions, acts, practices, and courses
of business constituting violations of the federal securities laws occurred within this district.
Defendants also reside and transact business in this district.
III.  DEFENDANTS
12. Defendant Krishnan is an individual residing in Frisco, Texas.
13. Defendant Shanmugam is an individual residing in Frisco, Texas.
14. Defendant Gounder is an individual residing in Frisco, Texas.
15. Defendant Nanban Ventures is a Texas limited liability company with its
principal place of business in Plano, Texas.  The Founders own and control Nanban Ventures
through intermediary entities, with Krishnan owning 42.5%, Gounder owning 21.25%,
Shanmugam owning 21.25%, and an additional partner owing 15%.
16. Defendant GSM is a Texas limited liability company with its principal place of
business in Plano, Texas.  The Founders own and control GSM through intermediary entities,
with Krishnan owning 50%, Gounder owning 25%, and Shanmugam owning 25%.  The
Founders are signatories to GSM’s bank accounts and have access to its brokerage accounts.
17. Defendant Himalayan is a Texas limited liability company with its principal place
of business in Plano, Texas.  The Founders control and, upon information and belief, own
Himalayan through intermediary entities, with Krishnan owning 50%, Gounder owning 25%,
and Shanmugam owning 25%.  The Founders are signatories to Himalayan’s bank accounts.

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18. Defendant Centum is a Texas limited liability company with its principal place of
business in Plano, Texas.  The Founders own and control Centum through intermediary entities,
with Krishnan owning 50%, Gounder owning 25%, and Shanmugam owning 25%.  The
Founders are signatories to Centum’s bank accounts and have access to its brokerage accounts.
IV.  FACTUAL ALLEGATIONS

A. Origin of the Nanban Entities and GK Strategies
19. “Nanban” is a Tamil word meaning “friend.”
20. In or around 2020, the Founders began using various “Nanban” branded entities
to promote what they claim is a propriety and purportedly highly successful options trading
system called “GK Strategies.”  According to Krishnan, who goes by “GK,” GK Strategies
encompasses five levels of increasingly complex trading methods.  Krishnan dubbed these
various levels as “GK Strategies Level One,” “GK Strategies Level Two,” et seq.
21. Krishnan and the other Founders had careers in the IT industry.  They have little
or no experience or training in the investment industry.
22. Before 2020, Krishnan primarily offered his GK Strategies to friends and family
on an ad hoc basis.  In the spring or early summer of 2020, the Founders launched the first of
several for-profit hedge funds to employ GK Strategies.
23. In July 2020, the Founders founded the Nanban Foundation, with the purported
charitable purpose of helping “Nanbans” achieve financial freedom by teaching GK Strategies
Levels One and Two.
24. However, the Nanban Foundation’s primary purpose was to recruit potential
investors for the hedge funds.  Through word-of-mouth in the DFW-area Indian community, as

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well as Krishnan’s YouTube videos touting his purported successes using GK Strategies,
prospective investors connected with the Nanban Foundation.
25. The Nanban Foundation offered prospective investors free webinars where they
could learn GK Strategies Levels One and Two.  However, prospective investors were told that
they would have to invest in Nanban’s hedge funds if they wanted to maximize their returns
using GK Strategies Levels Three through Five.
26. From 2020 until approximately September 2021, the Founders raised
approximately $116.5 million from approximately 395 investors for four successive hedge funds.
All four hedge funds underperformed the S&P 500 Index.  The last two hedge funds realized
annual returns that significantly underperformed the S&P 500 index.
27. Due to the poor performance of the last two hedge funds, many investors
complained about the returns and requested their money back.  The Founders closed the last two
hedge funds as a result of the redemption requests and returned the hedge fund investors’
original capital, along with a small purported profit.
28. Unbeknown to investors, these payments to the hedge fund investors were
sourced, at least in part, from a commingled bank account containing money from other,
subsequent investors, as alleged further below.
29. The Founders claim that they have relinquished control of the Nanban Foundation
to their wives, who are members of Nanban Foundation’s board of directors.
B. Nanban Ventures and the VC Funds
30. In March 2021, the Founders formed Nanban Ventures.  Nanban Ventures, as
alleged in more detail below, is an unregistered investment adviser firm that the Founders and a
fourth partner own, manage, and control.

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31. When investors became dissatisfied with the performance of the hedge funds, the
Founders pivoted from the hedge funds to so-called venture capital funds (“VC Funds”).   The
VC Funds are private investment funds.
32. Unlike the hedge funds, Krishnan and other Nanban representatives told investors
that the VC Funds would generate returns for investors from other investments beyond GK
Strategies.  The VC Funds would: (1) engage in trading using GK Strategies; (2) invest in start-
up companies, primarily in the technology sector; and (3) make real estate investments.
33. From approximately May 2021 to July 2023, the Founders, acting through
Nanban Ventures, raised approximately $89.8 million from over 350 investors (“VC Fund
Investors”) in multiple states by selling limited partnership units in five VC Funds.  The
following chart summarizes the offerings:
VC Fund Raise Period Investors
Amount
Raised
Capital May 11, 2021 – July 18, 2023 105 $25,509,592
AAA Sept. 17, 2021 – July 18, 2023 99 $5,426,494
Ganga Dec. 10, 2021– July 18, 2023 95 $19,280,193
Abundance     Dec. 27, 2021 – July 18, 2023 6 $23,325,000
Nile Aug. 26, 2022 – July 18, 2023 81 $16,266,872
 Total Raised:  $89,808,151

34. The VC Fund Investors were also offered the opportunity to either receive
purported profit distributions or reinvest their purported profit distributions back into the VC
Funds.  Most investors chose to reinvest their purported profits.  VC Fund Investors purchased
over $12.5 million dollars of additional units in the VC Funds by reinvesting their purported
profit distributions.

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35. Through at least July 2023, Nanban Ventures continued to solicit additional
investments (“top off investments”) from existing VC Fund Investors, whereby the investors
could buy additional units to add to their existing VC Funds’ investments.
36. As with the hedge funds, Nanban Ventures obtained VC Fund investors, inter
alia: (a) through referrals from the Nanban Foundation, and (b) when individuals were routed to
Nanban Ventures after watching one of Krishnan’s YouTube videos.  Most of the VC Fund
investors are retail investors that are members of the Indian community in the DFW-area or other
parts of the United States.
37. Nanban Ventures is an unregistered investment adviser the Founders formed to
raise money for, and provide investment advice to, the VC Funds.  Nanban Ventures’ advisory
clients are the VC Funds.  Similarly, the Founders and the new partner were the designated
portfolio managers for the VC Funds, and they were the individuals who provided the investment
advisory services to the VC Funds and selected the investments for the VC Funds.  The Founders
and the new partner met to discuss and evaluate the performance of the VC Funds and to make
investment decisions for the funds.
38. Nanban Ventures and each of the Founders provided investment advice to the VC
Funds for compensation in the form of a 2% management fee based on the total Assets Under
Management (“AUM”).  Nanban Ventures and each of the Founders were each engaged in the
business of advising the VC Funds as to the advisability of investing in, purchasing, or selling
securities, including when it directed the VC Funds to obtain equity investments in start-up
companies and to purchase the Related Party Notes (defined and described below).
39. Krishnan’s investment advice primarily focused on advising the VC Funds
regarding trading using GK Strategies, with Shanmugam and Gounder also advising in this

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regard.  Each of the Founders used VC Fund capital to trade using GK Strategies in GSM’s
brokerage accounts.  Shanmugam also advised the VC Funds about their real estate investments.
Gounder served as chief investment officer of Nanban Ventures and assisted in vetting start-up
companies.  The Founders also brought in a new partner to advise on the VC Funds’ investments
in start-up companies.
40. The Founders also formed a separate management entity and a general partner
entity for each fund (except the Capital Fund).  For the Capital Fund, Nanban Ventures served as
both the management entity and the general partner entity.  The Founders manage and control the
VC Funds’ management entities and general partners.
41. The VC Funds were required to pay their respective management entity a 2%
AUM fee and to pay the general partner entity a share of any profits that exceeded 12-15%.  The
source of compensation for the Founders and Nanban Ventures included advisory fees that the
VC Funds paid for investment advisory services, namely, the 2% AUM fee, which the Founders
and Nanban Ventures received directly or through the VC Funds’ management entities.
C. The Note Investors
42. In addition to promoting and soliciting investments in the VC Funds, the
Founders also offered and sold high-yield promissory notes (“Investment Notes”) to investors
(“Note Investors”).  One or more of these investors invested in the Investment Notes, because the
investor did not want to participate in the VC Funds or the earlier hedge funds, but did want to
make investment returns from GK Strategies.
43. The Founders sourced the Note Investors through their ties to the Indian business
community, the Nanban Foundation, or through their previous careers in the IT sector.  Most of

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the Note Investors are high-net worth individuals in the Indian community or companies they
control.
44. Between April 16, 2021 and July 18, 2023, the Founders raised approximately
$39.9 million in investments from approximately 10 Note Investors through at least 15
Investment Notes issued by the Founder Companies.
45. The Investment Notes obligated the issuing Founder Company to make interest
payments of 18% per year to the Note Investors, usually for a period of five years, in exchange
for the principal investments.
46. Krishnan told Note Investors that he would use GK Strategies or other “cash-
flow” strategies to protect their principal while turning a profit.  For example, in approximately
the Spring of 2020, Krishnan told a Note Investor located in Texas that with GK Strategies, he
could make 20-25% returns while never losing more than 1-2% of his invested capital.
47. As another example, in approximately the Spring of 2021, Krishnan told a Note
Investor also located in Texas that his GK Strategies trading system earned investors annual
returns of 20-40%.  To avoid paying fees associated with investing in the VC Funds, Krishnan
recommended that the Note Investor purchase an Investment Note to invest directly in GSM,
which Krishnan represented made trades using GK Strategies.
D. The VC Fund Units and the Investment Notes are Securities
48. Section 2(a)(1) of the Securities Act and Section 3(a)(1) of the Exchange Act
define “security to include, among other instruments, any “investment contract” or “note.”
49. The limited-partnership units in the VC Funds are “investment contracts” under
the Securities Act and the Exchange Act.  Investors invested their money to obtain an investment
return and the funds were pooled with funds from other investors.  These were entirely passive

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investments, and investors had no role or say in the operations or management of the VC Funds
or the underlying fund investments.  The VC Fund Investors were entirely dependent upon, and
expecting to profit solely from, the Founders’ expertise and efforts to manage the VC Funds and
to select and manage the funds’ underlying investments.  Moreover, the VC Fund’s offering
documents specifically identify the limited-partnership units as securities.
50. The Investment Notes are also securities under the Securities Act and the
Exchange Act, which specifically include the term “notes” within the definition of securities.  In
addition, the Investment Notes are “investment contracts.”  Investors invested money to obtain
fixed investment returns of 18% per year, typically for a period of five years.  The Note
Investors’ funds were pooled.  The Investment Notes were entirely passive investments, and the
Note Investors had no role or say in the operations or management of the Founder Companies.
The Note Investors were entirely dependent upon, and expecting to profit solely from, the
Founders’ expertise and efforts to trade using GK Strategies.
51. No registration statements have ever been filed with the SEC or are in effect as to
any offerings of the limited-partnership units in the VC Funds or the Investment Notes.
E. Nanban Ventures and the Founders Misrepresented GK Strategies
52. Defendants made multiple misrepresentations and omissions about GK Strategies
to the VC Fund Investors and Note Investors.  As alleged in more detail below, the
misstatements and omissions were made in the VC Funds’ Private Placement Memorandum
(“PPMs”), in videos and podcasts posted on the internet that remain available online, in investor
web presentations, and orally to VC Fund Investors and Note Investors.
53. The Founders and Nanban Ventures made these misstatements and omissions
about GK Strategies to investors in connection with the offers, purchases, and sales of the

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limited-partnership units in the VC Funds (including reinvestments therein) and the Investment
Notes.  The misrepresentations and omissions include the following (emphasis added):
a. On December 2, 2020, Krishnan represented during a Better Wealth
Podcast titled Making a Killing With Index, Options, and The Asset with CEO of Nanban
Investments that was posted and remains available on YouTube that:
I started sharing with my friends and family my level 1, level 2
strategies, and I copyrighted all of my five strategies under GK
Strategies copyright. So first two strategies, level 1, level 2,
allows people to generate 18 to 30 percent on their own, okay,
from cash flow perspective.  My level 3, level 4, level 5 takes it to
a completely different level. We, we consistently generate more
than a hundred percent in the higher level strategies....in any
market condition. That’s the beauty, up, sideways, down market.
So from 2009 till early part of 2020, volatility was low, right? . . .
And our returns were between 18 to 24 percent still. . . . But with
this year when volatility increased, you have no idea.  Our people
are making 60 percent, 70 percent return this year.
Since 2001, my worst year has been 21 percent up.
Just to tell you, in private fund we are able to give 58 percent
return every year.
But in Nanban Investments, which is our for-profit private fund
business, let’s say they invest hundred K. So that is their hundred
K capital into our business.  In the first year we would give them
$58,000 return. That’s 58 percent return.  That’s what we
specialize in.  Even though we make more than hundred
percent, we give 58 percent only to the investors, rest goes to the
company, and we do a lot of charitable work using that income.

b. The PPMs for the VC Funds represent that Krishnan will use GK
Strategies to outperform the market, as illustrated by the following statement from the Nanban
Ventures AAA Fund PPM, which appears in similar form in the other VC Fund PPMs:
[Krishnan] has been using “GK Strategies” to generate consistent
returns from US financial market for himself and for his friends
and family members.

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As Chief Executive Officer and Portfolio manager of Nanban
Investments LLC. [Krishnan] is managing the private equity
fund(s) to generate returns that will consistently over perform
the S&P 500 Index.  To achieve those kind of returns,
[Krishnan] will be using his proprietary strategies.
When asked to explain his claims that GK Strategies over performs the S&P 500 Index,
Krishnan testified that he told investors that “[a]s long as the S&P 500 doesn’t go to zero,
my strategy will outperform [the] S&P 500” and do so “[a]ll the time” and “it will beat
the S&P 500 from cash flow perspective 100 percent of the time.”
c. On December 21, 2022, Krishnan represented, during an interview titled
Episode #79 GK’s Way to Financial Freedom featuring Nanban GK that was posted and remains
available on YouTube, that:
I don’t even care if the market has dropped by 20 percent because I know every
month with 100 percent consistency and we will get cash. ... So, when you are
getting cash every week, every month with 100 percent consistency, your second
bank account will always.  It cannot go down.

...it only takes one hour a week to do my strategies. That’s all because it’s purely
mechanical. You don’t look at any reports, no indicators, no charts. So, when I
saw their lifestyle has improved so much because they have got that belief in their
mind that my 600,000 is going to be safe, and I am making every year 120,000,
minimum at 20 percent . ... And in this market, the current market that is
going on, the S&P is down 20 percent, volatility has gone up big time, people
are going to make 40, 50 percent this year...  So that’s the beauty of volatility
[in our] strategy.

d. On August 9, 2021, Krishnan represented, during an interview on FunAsia
Radio titled Gopala Krishnan GK | Nanban Interview that was posted and remains available on
Facebook, that:
So in 2000 – from 2001 (inaudible) and I figured out that this
strategy works hundred percent of the time.  I didn’t keep it
with me because I believe in community growing together.

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From 2001 until now, consistent results... And that is key to
success.
So when you are making cash flow every week with 100
percent consistency, all those amounts would add up to big
profits later.

e. On November 5, 2021, during an interview titled Gopala “GK” Krishnan,
Chairman & CEO, Nanban Group of Companies, DotCom Magazine Exclusive Interview that
was posted and remains available on YouTube, Krishnan represented that:
So Nanban came into existence just 18 months ago because of the
strategies called, “GK Strategies,” that I had developed back in
2001, which had worked for me [and] my family office for many,
many years, with principal protection and consistent positive
returns in any market conditions.

f. On January 31, 2023, Krishnan represented during a Nanban Growth Fund
webinar made available online to potential investors that:
So, it’s a very, very diversified strategy that has been working in
Nanban Ventures and Nanban Ventures has delivered for the
last 18 months consistent double-digit returns.

g. On May 19, 2023, Krishnan represented during a telephone call with a
potential investor that:
If you only want to participate in GK Strategies, that is our Nanban
Hedge Fund where the minimum now is $100 million ... that is
where we apply level 1 to level 5 all the strategies to generate
around 30% every year that is what our goal is through our Nanban
Hedge Fund.  And then we have the next best is Nanban Ventures
where 60% of the capital goes to GK strategies, 20% goes to all
kinds of real estate, and only 20% goes to all kinds of startups....
So our people are getting returns every year.... Our investor, who
put $10 million is getting minimum, you know, around 20% a year.

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What I meant in this podcast was, I think in 2020, the volatility in
the market was very high. So GK strategy itself, would have
generated 50, 60, 70% [e]very year instead of 20, 30%.

h. In the spring of 2020, Krishnan told a Note Investor in Texas during a
webinar that GK Strategies Levels One and Two would earn double-digit returns of 20-25
percent while at the same time being a conservative investment strategy that protected investor
capital.  He told the investor that GK Strategies would never lose more than 1-2 percent of an
investor’s capital and that his system always beat the stock market and an index like the S&P
500.  Krishnan also told the investor that if he wanted to earn even higher returns from GK
Strategies Levels Three, Four, and Five, he would have to invest directly with Krishnan and
could earn an extra 5-15 percent in annual returns.
i. On October 19, 2022, Krishnan represented during a Global Summit
webinar made available online to potential investors that:
So everything goes back to, within Nanban, Nanban is powered by
GK Strategies.... It’s after my name. And it’s copyrighted and
patented in U.S. So we use those strategies to make money.
54. The statements in paragraph 53 are false and misleading, because GK Strategies is
not “proprietary,” “copyrighted,” “patented,” or even “unique.”  There is no algorithm or other
proprietary technology or method underpinning GK Strategies.  GK Strategies is merely a
covered call option investment strategy with put protection.  This is a widely known and publicly
available technique.
55. The statements in paragraph 53 are also false and misleading, because GK
Strategies does not consistently outperform the S&P 500 index, which is a proxy for the public
stock market.  To the contrary, GK Strategies only does so in limited market scenarios.

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56. The statements in paragraph 53 are also false and misleading, because GK
Strategies does not always generate positive returns, and there are market conditions where GK
Strategies generates negative returns.
57. The statements in paragraph 53 are also false and misleading, because, at the time
they were made, GK Strategies had not consistently outperformed the S&P 500 index or
obtained the high percentage returns that Krishnan claimed.  Trading records demonstrate that
GK Strategies has not produced returns consistently exceeding the returns of the S&P 500 index.
To the contrary, the returns were, with limited exceptions, lower than the returns of the S&P 500
index, lower than the percentage returns that Krishnan claimed, and negative on numerous
occasions.
58. The statements in paragraph 53 are also false and misleading, because the
Founders and Nanban Ventures omitted (a) their actual returns using GK Strategies and (b) that
two Nanban hedge funds—which used GK Strategies—were closed, in part, due to investor
complaints about poor performance.  These omissions were highly misleading in light of the
other statements that the Founders and Nanban Ventures made about the performance of GK
Strategies.
59. Nanban Ventures also falsely told hedge fund investors—that they were also
soliciting to invest in the VC Funds—that they were offering an exit to the hedge funds, because
they could not fully deploy GK Strategies to protect intellectual property while they were under
an SEC review.   In fact, the hedge funds were actually closed because investors asked for their
money back due to the hedge funds’ poor performances, not to protect intellectual property in
connection with an “SEC review” or otherwise.

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60. The Founders and Nanban Ventures made the misstatements and omissions
alleged above.  As described above, Krishnan made most of the statements himself, and the other
Founders also participated in one or more in-person meetings with Note Investors in which the
misrepresentations were made.  All of the Founders and Nanban Ventures made the statements in
the PPMs, because each of the Founders reviewed and approved the PPMs and they each had
final authority over the contents of the PPMs.
61. The Founders knew, or were severely reckless in not knowing, that their
statements and omissions about GK Strategies were false and misleading.  The Founders made
trades using GK Strategies in the hedge funds both independently and in concert.  Therefore, the
Founders knew, or was severely reckless in not knowing, that GK Strategies did not perform as
represented in the hedge funds.  They perpetuated this misrepresentation when they authorized
VC Fund Investors to receive PPMs claiming that Krishnan would apply proprietary strategies
that would generate returns that would consistently over perform the S&P 500 Index.
Additionally, the Founders all knew that the last two Nanban hedge funds were closed due to the
poor performance of GK Strategies.  The Founders were also severely reckless because they did
not analyze Krishnan’s historical trading performance using GK Strategies prior to including the
claim that the “proprietary strategies” would consistently over perform the S&P 500 Index in the
VC Funds’ PPMs.
62. These misrepresentations and omissions were material, because a reasonable
investor would consider the fact that GK Strategies was not unique and did not have investment
returns as represented in deciding whether to invest.
F. Defendants Misrepresented Profits Earned and Misused Investor Funds
63. After Defendants induced investors to purchase the VC Fund units and the

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Investment Notes based on their false narrative of Krishnan’s investing success, they
misrepresented the performance of those investments (VC Funds and Investment Notes) and
misused investor funds to induce additional investments and to keep their fraudulent enterprise
afloat.  In particular, Defendants misused investor funds by using at least approximately $17.8
million of investor funds to make Ponzi payments—purported profit distributions to investors
using, in substantial part, other investor funds.
i. Profitability Misstatements to VC Fund Investors
64. The Limited Partnership Agreement (“LPA”) for each VC Fund provides that
investors are entitled to receive profit distributions if there is a positive net amount resulting
from the allocation of profit and loss.  The LPAs further provide that the VC Fund Investors may
elect to take distributions of their share of these profits in cash or to reinvest the amount back
into the respective VC Funds in exchange for additional units.
65. Nanban Ventures consistently represented to the VC Fund Investors at investor
update webinars that all the Founders typically attended that the VC Funds were highly
profitable.  In total, between April 16, 2021 and July 18, 2023, Nanban Ventures, through its
third-party fund administrator, told VC Fund Investors that the VC Funds had generated
approximately $23.2 million in purported profits.
66. In a webinar with investors in or around January 2023, Nanban Ventures, at the
Founders’ direction, provided the VC Fund Investors with a Schedule of Investments (“SOI”)
purportedly showing that the VC Funds had achieved profits of approximately $10 million in the
second half of 2022.

19
67. As alleged at paragraph 53 above, on a May 19, 2023 telephone call, Krishnan
also represented to a potential investor  that VC Fund investors were receiving minimum returns
of 20% per year every year.
68. As another example, during a July 7, 2023 Nanban Ventures Fund Performance
Review Webinar, Nanban Ventures’ CFO represented to VC Fund Investors that the VC Funds
had achieved profits of approximately $10.3 million from January 2023 to June of 2023 from the
“fintechs” alone.
69. Believing the VC Funds to be highly profitable, most investors chose to reinvest
their share of purported profits in the VC Funds.
70. A smaller subset of investors chose to receive their share of purported profits as
cash distributions.  Between April 16, 2021 and July 18, 2023, the Founders caused the VC
Funds to make purported profit payments of approximately $10.7 million to those investors.
These payments were themselves a representation of the VC Funds’ purported profitability.
71. The Founders also made interest payments to the Note Investors, including
interest payments that, at times, exceeded the 18% amount listed on the face of the Investment
Notes.  These payments were purportedly based on GK Strategies’ trading profits exceeding
18%.  The interest payments to the Note Investors were, themselves, deceptive acts and false
representations of profitability to the Note Investors.
72. Defendants’ representations about the profitability of the VC Funds and
Investment Notes were false and misleading.  When the statements were made, the VC Funds
had not achieved the represented profits.  In fact, the VC Funds could not have achieved the
represented profits because the VC Funds achieved, at most, only $1.97 million in profits during
the entire period of April 16, 2021 through July 18, 2023, most of which was actually derived

20
from the sale of real estate.  This amounts to a return of only 2.2%.  During the same period, the
Founder Companies suffered a net trading loss, and therefore did not have trading profits to
support payments to Note Investors, let alone payments that exceeded 18%.
73. As alleged below, any other purported profits were illusory.  Specifically, any
other so-called profits to the VC Funds were not investment profits from fund investments in GK
Strategies, start-up companies, or real estate.  Instead, they were merely interest payments on
related-party promissory notes entered into between the Founder Companies and other
companies the Founders controlled.
ii. Ponzi Payments to VC Fund, Note, and Hedge Fund Investors
74. Between April 16, 2021 and July 18, 2023, the Founders and Nanban Ventures
caused the VC Funds to pay approximately $10.7 million dollars to VC Fund investors who
chose to receive purported profit distributions instead of reinvesting their profits.
75. Between April 16, 2021 and July 18, 2023, the Founders caused the Founder
Companies to pay approximately $21.04 million in interest payments and return of principal to
Note Investors.
76. At least approximately $17.8 million of these payments to VC Fund Investors and
Note Investors (as alleged in the previous two paragraphs) were Ponzi payments that were
sourced with funds from other investors.
77. Additionally, in August 2022, the Founders closed out their two remaining hedge
funds and purported to return the hedge fund investors’ principal with a small amount of profit.
In reality, the hedge funds did not have enough money in their account to make these.  Instead,
the Founders caused the Founder Companies to pay approximately $3.5 million to the hedge
fund investors using investor funds received from the VC Fund Investors and the Note Investors.

21
At least approximately $2.3 million of this $3.5 million was paid to hedge fund investors after
the hedge funds had ceased operations.  Consequently, the hedge fund investors received $2.3
million in Ponzi payments.
 d.   Improper Payments to the Founders and Nanban Ventures
78. Defendants also misused investor funds to compensate the Founders.  The PPMs
disclose to the VC Fund Investors that the Founders, through related entities, would make money
in two ways: (a) a 2% AUM fee, and (b) the general partner of the VC Fund’s share of any
profits that exceeded 12-15%.
79. The Founders did not disclose to Note Investors that they would take any portion
of their principal investments for themselves, and at least one Note Investor in Texas specifically
invested in an Investment Note and not a VC Fund to avoid paying AUM and general partner
fees.
80. Yet, between July 29, 2021 and June 20, 2023, the Founders, acting through the
Founder Companies, paid themselves at least approximately $6 million from commingled
investor funds, including payments of approximately $3.3 million to Krishnan, $1.8 million to
Gounder, and $900,000 to Shanmugam.  In addition, the VC Funds transferred approximately $2
million in compensation to the VC Funds’ general partner entities and management entities,
including Nanban Ventures.  These payments were not authorized by the VC Funds’ documents
and were also made, at least in substantial part, using investor funds.
81. Defendants knew, or were severely reckless in not knowing, that their
misstatements and omissions about the profitability of the investments were false and misleading
and that they were misusing investor funds.  The Founders oversaw the investments for the VC
Funds and the Founder Companies, participated in meetings about the status of the investments,

22
and controlled the relevant bank accounts.  As a result, the Founders knew, or were severely
reckless in not knowing, that the VC Funds and Founder Companies were vastly overstating their
profits.  The Founders likewise knew that they were commingling investor funds and using
investor funds to pay false profit distributions and themselves.
82. As alleged at paragraphs 37-39 above, the Founders and Nanban Ventures are
investment advisers to the VC Funds.  They breached their fiduciary duty to the VC Funds by
using fund assets in a manner that was not authorized by the VC Funds’ documents, including
the operative PPMs and limited partnership agreements.
83. The misuse of investor funds and the related misstatements and omissions are
material, because a reasonable investor would consider the facts that they were receiving
purported profit payments that were actually sourced from other investors’ funds and that their
investment was not profitable, or at best significantly less profitable than represented, important
in deciding whether to invest or reinvest.
G. Defendants Misrepresented the Investments and Hid Self-Dealing
i. The Fake “Fintech” Companies
84. During a biannual investment meeting in or about January 2023, Nanban
Ventures, at the Founders’ direction, provided investors with the Statement of Investments (as
previously defined, “SOI”).
85. The SOI represented that the VC Funds had invested $56 million (over 69% of the
VC Funds’ total assets) into three purported “fintech” companies identified as “NorthStars
FinTech,” “Himalayan FinTech,” and “Sunshines FinTech.”  The SOI stated that these fintech
investments had generated revenue of over $8 million for the VC Funds.  Many VC Fund

23
investors reinvested their purported profits to purchase additional VC Fund units after receiving
the SOI.
86. “NorthStars FinTech” (which is an assumed name for Defendant GSM),
“Himalayan FinTech” (which is Defendant Himalayan), and “Sunshines FinTech” (which is an
assumed name for Defendant Centum) are not third-party companies.  These are the Founder
Companies, and they are all entities controlled by the Founders.  The Founders’ control of these
entities was not disclosed to investors.
87. The Founder Companies are also not fintech companies.  GSM is a company that
the Founders use to trade investor funds using GK Strategies, to issue Investment Notes, to make
false profit distributions, and, in some instances, to purchase real estate.  Centum is an
intermediary entity that the Founders use to issue Investment Notes, to shuttle investor funds to
GSM, to make false profit distributions, and, in some cases, to purchase bonds and real estate.
Himalayan is an intermediary entity that the Founders use to issue Investment Notes, to shuttle
investor funds to GSM and Centum, and to make false profit distributions.
88. The Founder Companies are not engaged in the development of specific
technologies used to enhance financial services, or engaged in any other activity that would
characterize the entity as a fintech company.
89. The Founder Companies have substantially no assets other than investor funds or
assets purchased with investor funds.
90. The Founder Companies are, in essence, undercapitalized companies that engage
in no business other than receiving investor funds and trading or investing on behalf of the
Founders using investor funds.  There were no fintech investments.

24
ii. The Related Party Notes
91. The VC Funds did not use investor funds to trade using GK Strategies as
represented.  Instead, Defendants structured the VC Funds’ purported GK Strategies investments
as a series of unsecured investment loans (“Related Party Notes”) evidenced by approximately
10 convertible promissory notes between the Founder Companies (as payors) and another VC
Fund-related intermediary that the Founders also controlled (as payees).
92. The Related Party Notes totaled more than $70 million dollars, which includes the
$56 million falsely referenced in the SOI as fintech investments.
93. The Founders commingled investor funds from all VC Fund Investor funds in one
bank account, and then further commingled the funds in the bank accounts of various special
purpose entities that the Founders controlled.
94. From there, the Founders, using the Related Party Notes, transferred more than
$70 million dollars of VC Fund Investor funds to the Founder Companies where the funds were
commingled with Note Investor funds.
95. The Related Party Notes, which were not disclosed to investors, purportedly
require the Founder Companies to pay 18% biannual interest to the intermediary Nanban
companies, typically over a term of five years.  The Related Party Notes do not give the VC
Funds any ownership stake in the underlying companies or their investments.
96. The Founders also take the position that the Founder Companies are only required
to pay interest on these Related Party Notes on a “best efforts basis.”
97. Even if the Founder Companies or their investments are highly profitable, and the
Founder Companies choose to pay the interest (because they apparently claim that it is not
required), the VC Funds’ profits are purportedly capped at 18%.  Meanwhile, the VC Fund

25
Investors have no protection if these uncapitalized entities fail to pay off the Related Party Notes,
which are unsecured.
98. As a result, more than 78% of the VC Funds assets were deployed to the Related
Party Notes.  Nanban Ventures and the Founders used the Related Party Notes to create the false
appearance of investment profit.
99. The Founders and Nanban Ventures did not disclose—and in fact actively
concealed using assumed names—that the so-called fintech companies were the Founders’
controlled entities and were not fintech companies.  The Founders and Nanban Ventures also did
not disclose that the investments in the Founder Companies were loans, much less related-party
loans.  The Founders and Nanban Ventures further failed to disclose that most of the VC Funds’
capital was deployed to these purported Related Party Notes.
100. In addition to the SOI used to deceive VC Fund Investors, Krishnan also
attempted to mislead a potential VC Fund Investor in a January 31, 2023 investor pitch.  During
that investor pitch, Krishnan did not disclose his ownership or control of the Founder
Companies, the loan structure, or that profits were tied to GK Strategies. Rather, Krishnan stated
generically that Nanban Ventures was invested in “some very strategic private companies that
are already producing cash flow.” Krishnan further gave the impression that the companies were
arms-length third parties by stating, “[t]hey don’t want to go public, but they all have been
generating really good cash flow. They are allowing us to participate in their company.”
101. The Founders and Nanban Ventures knew, or were severely reckless in not
knowing, that their misstatements and omissions about the VC Funds’ investments were false
and misleading.  The Founders knew that they controlled the Founder Companies, and that these
companies were neither independent third-party companies nor fintech companies.  The

26
Founders also met regularly to discuss the VC Funds’ investments, so they knew, or were
severely reckless in not knowing, that investor funds were being used to fund the purported loans
between Nanban entities.  Gounder signed most or all Related Party Notes on behalf of GSM.
102. As alleged at paragraphs 37-39 above, the Founders and Nanban Ventures are
investment advisers to the VC Funds.  They breached their fiduciary duties to the VC Funds by,
among other things, entering into the Related Party Notes, which were not in the VC Funds’ best
interest, and by failing to fully and fairly disclose that the VC Funds were investing in the
Founder Companies.
103. The misstatements and omissions about the VC Funds’ investments were
material, because a reasonable investor would consider the existence of a conflict of interest and
the fact that their investment funds had not been invested as represented important in deciding
whether to invest.
104. The Related Party Notes are securities under the Securities Act and the Exchange
Act, which specifically include the term “notes” within the definition of securities.  In addition,
the Related Party Notes are “investment contracts.”  The VC Funds, through related entities,
invested money to obtain fixed investment returns of 18% per year, typically for a period of five
years.  The VC Funds money was pooled with funds from other VC Funds and Note Investors.
The VC Funds were entirely dependent upon, and expecting to profit solely from, the Founders’
expertise and efforts to trade using GK Strategies.
105. The Founders owned and controlled Nanban Ventures and each of the Founder
Companies.  Acting as a principal for their own accounts, the Founders sold the Related Party
Notes to their advisory clients, the VC Funds.
106. Before the completion of the transactions in which the Founders sold the Related

27
Party Notes, the Founders did not: (a) disclose the transactions in writing to their clients, (b)
disclose the capacity in which they were acting, and/or (c) obtain the consent of the clients to
engage in such transactions.
H. Krishnan Misrepresented Nanban Ventures’ AUM
107. To convince investors to invest in the VC Funds, Krishnan made several
additional misrepresentations to investors about Nanban Ventures’ purported size and AUM:
a. On December 2, 2020, during a Better Wealth Podcast titled Making a
Killing With Index, Options, and The Asset with CEO of Nanban Investments that was posted and
remains posted on YouTube, Krishnan nodded in agreement when asked by the interviewer,
“within less than a year, you guys have raised over $950 million?”
b. In February 2021, during a YouTube video titled How GK financial
strategy won more than 25,000 people’s confidence? that was posted a year after the Nanban
financial organization came into existence, Krishnan represented that Nanban was “almost a $1.2
billion company.”
c. In an undated interview posted on the Investment Fund Secrets (IFS)
“Fund Launch” website and titled Investment Fund Secrets, Krishnan represented that “[w]e
have gone from zero to $2.5 billion in 17 months.”
d. On October 19, 2022, during an IBC Tamil TV interview titled Global
Summit of Tamil Entrepreneurs & Professionals – Mr. Nanban GK Interview that was posted
and remains available on YouTube, Krishnan represented that “all the six divisions that we have
is worth INR 96,000 crores [960,000,000,000 Indian Rupees] ($11.5 billion).”
108. These statements are false and misleading.  At the times that the statements were
made, the Nanban-related companies never had more than $130 million in AUM.  On some of

28
the dates that the statements were made, the AUM was significantly less.  Krishnan knew, or was
severely reckless in not knowing, that the statements were false, because he had direct
knowledge of the actual size of the assets he managed.  The misstatements identified in
paragraph 107 above were material, because a reasonable investor would find it important in
making an investment decision to know that his or her investment adviser was grossly
overstating the size, success, and bona fides of its business.
I. Defendants Are Engaged in an Ongoing Fraud
a.  Ongoing Offerings
109. Defendants continue to offer and sell securities.  In 2023, the Founders sought to
expand their operations globally and began soliciting international investors from the United
Kingdom, Singapore, India, and the Gulf region to invest in the VC Funds.  As recently as July
2023, Nanban Ventures launched a new venture capital fund called the Eco Harmony Fund LP.
Upon information and belief, that offering is ongoing.
110. At least as late as July 2023, Nanban Ventures continued to solicit current fund
investors by offering them the option to reinvest purported profit distributions in the VC Funds
or to make additional “top off” investments to buy additional units in the VC Funds.  Further, a
Note Investor deposit and a VC Fund Investor deposit was made at least as recently as July 12,
2023 and July 14, 2023, respectfully.
      b.  The Compliance Email and Acknowledgement Form
111. During the SEC’s investigation that preceded the filing of this action, Defendants
learned that the SEC had discovered that (a) the so-called “fintech” companies were not fintech
companies and were related-party companies disguised as third-party companies, and (b)
Defendants used the Related Party Notes to create the false appearance of investment profit.

29
112. Thereafter, on or about August 9, 2023, Nanban Ventures emailed all VC Fund
Investors (“Compliance Email”).    The Compliance Email states that a forthcoming
acknowledgment form (“Acknowledgement Form”) was part of a “formal compliance process, []
to ensure that all [VC Fund] investors have a clear understanding of how earnings are derived.”
113. The Acknowledgement Form purports to require investors to affirm that Nanban
Ventures previously disclosed to them that the Founders owned and controlled the so-called
fintech companies, which the VC Funds purportedly invested in “through debt notes to portfolio
companies to generate minimum interest/return of 18% per year on a best effort basis [and]
[u]sing proprietary cash flow strategies on market indices and bonds, Nanban Ventures invests
through these companies (Centum FinTech LLC, Himalayan FinTech LLC and Sunshine
FinTech LLC etc.) to provide semi-annual non-guaranteed earnings.”
114. The Compliance Email and the Acknowledgement Form are false and misleading
and are more deceptive acts in furtherance of Defendants’ ongoing scheme to defraud.
Defendants did not disclose the Founders’ control of the Founder Companies, the Related Party
Notes, or the loan terms when the VC Fund Investors invested or reinvested in the VC Funds
and, if at all, only after Defendants became aware of the SEC raising this issue during its
investigation.
115. The Acknowledgement Form also contains misrepresentations and omissions
about the so-called loan investments.  The Acknowledgement Form:
a. falsely claims that the notes have minimum interest of 18%, when in fact
interest is capped at a stated percentage;
b. states that interest on the notes will only be paid on a “best effort basis,”
when the face of the notes had no such qualification;

30
c. fails to disclose the trading losses that the Founder Companies have
incurred from GK Strategies trading.
116. Defendants knew that these disclosures were not previously made in the manner
represented in the Acknowledgement Form.  In fact, Krishnan has previously admitted under
oath that investors were not aware of the loans or their terms.  Defendants are using the
Compliance Email and Acknowledgement Form as deceptive devices, are falsely leading
investors to believe they must sign the letter or potentially risk their investment, and are
potentially causing investors to unknowingly comprise claims.
V.  CLAIMS FOR RELIEF

FIRST CLAIM FOR RELIEF
Violations of the Antifraud Provisions of the Exchange Act
Exchange Act Section 10(b) and Rule 10b-5 thereunder

Against all Defendants

117. The SEC incorporates by reference each and every allegation contained in
paragraphs 116 above.
118. By engaging in the conduct alleged above, Krishnan, Shanmugam, Gounder,
Nanban Ventures, GSM, Centum, and Himalayan, directly or indirectly, in connection with the
purchase or sale of securities, by the use of any means or instrumentality of interstate commerce,
or of the mails or of any facility of any national securities exchange, knowingly or with severe
recklessness:
a. employed a device, scheme, or artifice to defraud; and/or
b. made an untrue statement of a material fact, or omitted to state a material
fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading; and/or

31
c. engaged in an act, practice, or course of business which operated or would
operate as a fraud or deceit upon any person.
119. By reason of the foregoing, Krishnan, Shanmugam, Gounder, Nanban Ventures,
GSM, Centum, and Himalayan have violated, and unless enjoined will continue to violate,
Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. §
240.10b-5].
SECOND CLAIM FOR RELIEF
Violations of the Antifraud Provisions of the Securities Act
Securities Act Section 17(a)

Against all Defendants

120. The SEC incorporates by reference each and every allegation contained in
paragraphs 116 above.
121. By engaging in the conduct alleged above, Krishnan, Shanmugam, Gounder,
Nanban Ventures, GSM, Centum, and Himalayan directly or indirectly, in the offer or sale of
securities, by the use of the means or instruments of transportation or communication in
interstate commerce or by use of the mails, have:
a. knowingly or with severe recklessness employed a device, scheme, or
artifice to defraud; and/or
b. knowingly, recklessly, or negligently obtained money or property by
means of an untrue statement of a material fact or an omission to state a
material fact necessary in order to make the statements made, in light of
the circumstances under which they were made, not misleading; and/or

32
c. knowingly, recklessly, or negligently engaged in a transaction, practice, or
course of business which operated or would operate as a fraud or deceit
upon the purchaser.
122. By reason of the foregoing, Krishnan, Shanmugam, Gounder, Nanban Ventures,
GSM, Centum, and Himalayan have violated, and unless enjoined will continue to violate,
Section 17(a) of the Securities Act [15 U.S.C. § 77q].
THIRD CLAIM FOR RELIEF
Violations of the Antifraud Provisions of the Advisers Act
Advisers Act Sections 206(1) and (2)

Against Defendants Krishnan, Shanmugam, Gounder, and Nanban Ventures

123. The SEC incorporates by reference each and every allegation contained in
paragraphs 116 above.
124. By engaging in the conduct alleged above, Krishnan, Shanmugam, Gounder, and
Nanban Ventures, directly or indirectly, by the use of the mails or any means or instrumentality
of interstate commerce, while acting as investment advisers within the meaning of Section
202(a)(11) of the Advisers Act [15 U.S.C. § 80b-2(a)(11)], have: (a) employed a device, scheme,
or artifice to defraud a client or prospective client; and/or (b) engaged in a transaction, practice,
or course of business which operated as a fraud or deceit upon a client or prospective client.
125. With regard to the violations of Section 206(1) of the Advisers Act, Krishnan,
Shanmugam, Gounder, and Nanban Ventures engaged in the conduct intentionally or with severe
recklessness.  With regard to the violations of Section 206(2), Defendants Krishnan,
Shanmugam, Gounder, and Nanban Ventures engaged in the conduct at least negligently.

33
126. By reason of the foregoing, Krishnan, Shanmugam, Gounder, and Nanban
Ventures have violated, and unless enjoined will continue to violate, Sections 206(1) and (2) of
the Advisers Act [15 U.S.C. §§ 80b-6(1), (2)].
FOURTH CLAIM FOR RELIEF
Violations of Section 206(3) of the Advisers Act

Against Defendants Krishnan, Shanmugam, Gounder, and Nanban Ventures
127. The SEC incorporates by reference each and every allegation contained in
paragraphs 116 above.
128. By engaging in the conduct alleged above, Krishnan, Shanmugam, Gounder, and
Nanban Ventures, directly or indirectly, by the use of the mails or any means or instrumentality
of interstate commerce, while acting as investment advisers within the meaning of Section
202(a)(11) of the Advisers Act [15 U.S.C. § 80b-2(a)(11)], each acted as principal for its/his own
account, knowingly to sell securities (promissory notes) to or purchase securities from clients—
or knowingly to effect sales or purchases of securities for the account(s) of such client, without
disclosing to such clients in writing before the completion of such transactions the capacities in
which they were acting and obtaining the consent of the clients to such transactions.
129. By reason of the foregoing, Krishnan, Shanmugam, Gounder, and Nanban
Ventures have violated, and unless enjoined will continue to violate, Section 206(3) of the
Advisers Act [15 U.S.C. § 80b-6(3)].
FIFTH CLAIM FOR RELIEF
Violations of Section 206(4) of the Advisers Act and Rule 206(4)-8 Thereunder

Against Defendants Krishnan, Shanmugam, Gounder, and Nanban Ventures

130. The SEC incorporates by reference each and every allegation contained in
paragraphs 116 above.

34
131. By engaging in the conduct alleged above, Krishnan, Shanmugam, Gounder, and
Nanban Ventures, directly or indirectly, through the use of the mails or any means or
instrumentality of interstate commerce, while acting as investment advisers within the meaning
of Section 202(a)(11) of the Advisers Act [15 U.S.C. § 80b-2(a)(11)], engaged in an act,
practice, or course of business that was fraudulent, deceptive, or manipulative.
132. The VC Funds are “pooled investment vehicles” as defined in Rule 206(4)-8(b)
[17 C.F.R. § 275.206(4)-8(b)].
133. While acting as investment advisers to the VC Funds, Krishnan, Shanmugam,
Gounder, and Nanban Ventures: (a) made an untrue statement of a material fact or omitted to
state a material fact necessary to make the statements made, in light of the circumstances under
which they were made, not misleading, to an investor or prospective investor in the Fund; and/or
(b) engaged in an act, practice, or course of business that was fraudulent, deceptive, or
manipulative with respect to an investor or prospective investor in the Fund.
134. As a result, Krishnan, Shanmugam, Gounder, and Nanban Ventures have violated,
and unless enjoined will continue to violate, Section 206(4) of the Advisers Act [15 U.S.C. §
80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8].
VI.  JURY TRIAL DEMAND
The SEC demands a trial by jury on all issues that may be so tried.
VII.  RELIEF REQUESTED
Therefore, the SEC respectfully requests that this Court:
(a) Permanently enjoin all Defendants from violating Section 17(a) of the Securities
Act [15 U.S.C. § 77q], and Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule
10b-5 thereunder [17 C.F.R. § 240.10b-5];

35
(b) Permanently enjoin Krishnan, Shanmugam, Gounder, and Nanban Ventures from
violating Sections 206(1), (2), (3), and (4) of the Advisers Act [15 U.S.C. §§ 80b-6(1), (2), (3),
and (4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8];
(c) Permanently enjoin all Defendants from participating in the issuance, purchase,
offer, or sale of any security, whether directly or indirectly, including, but not limited to, through
any entity owned or controlled by them, provided, however, that such injunctions shall not
prevent each of Krishnan, Shanmugam, and Gounder from purchasing or selling securities for his
own personal accounts;
(d) Order, pursuant to Section 20(e) of the Securities Act [15 U.S.C. § 77t(e)] and
Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)], that Krishnan, Shanmugam, and
Gounder be prohibited from acting as an officer or director of any issuer that has a class of
securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l] or that is
required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)];
(e) Order Defendants to disgorge all ill-gotten gains obtained as a result of the
conduct described herein, plus prejudgment interest thereon, pursuant to Exchange Act Sections
21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)];
(f) Order Defendants to pay civil penalties pursuant to Section 20(d) of the Securities
Act [15 U.S.C. § 77t(d)], Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)], and,
with respect to Krishnan, Shanmugam, Gounder, and Nanban Ventures, Section 209(e) of the
Advisers Act [15 U.S.C. § 80b-9(e)];
(g) Grant such further relief as this Court may deem just and proper.

36
Dated: October 5, 2023 Respectfully submitted,
/s/ Keefe Bernstein
Keefe Bernstein
Texas Bar No. 24006839
(817) 900-2607
[email protected]
Jason P. Reinsch
Texas Bar No. 24040120
Direct Phone:  (817) 900-2601
[email protected]
Samantha Martin
Texas Bar No. 24065090
(817) 978-5035
[email protected]
Clemon Ashley
Illinois Bar No. 6294839
(817) 900-2627
[email protected]
Securities and Exchange Commission
801 Cherry Street, Suite 1900
Fort Worth, TX 76102
Counsel for Plaintiff
Securities and Exchange Commission
L.R. CV-5(a)(7) Certification
In accordance with L.R. CV-5(a)(7), I certify that a Motion to Seal the forgoing
document has been filed.
/s/ Keefe Bernstein
Keefe Bernstein

UNITED STATES DISTRICT COURT 
EASTERN DISTRICT OF TEXAS 

SHERMAN DIVISION 
 
  
SECURITIES AND EXCHANGE COMMISSION,  
  
                                              Plaintiff,        FILED UNDER SEAL 
    

v.        C.A. No.:  
         
GOPALA KRISHNAN, MANIVANNAN 
SHANMUGAM, SAKTHIVEL PALANI 
GOUNDER, NANBAN VENTURES LLC, 
GSM ETERNAL LLC (A/K/A NORTHSTARS 
FINTECH), HIMALAYAN FINTECH LLC,  
and CENTUM FINTECH LLC (A/K/A 
SUNSHINES FINTECH),  

       Jury Trial Demanded 

  
                                              Defendants.     
  

 
COMPLAINT 

Plaintiff Securities and Exchange Commission (“SEC”) files this Complaint against 

Defendants Gopala Krishnan (“Krishnan”), Manivannan Shanmugam (“Shanmugam”), Sakthivel 

Palani Gounder (“Gounder”), Nanban Ventures LLC (“Nanban Ventures”), GSM Eternal LLC, 

a/k/a NorthStars FinTech (“GSM”), Himalayan Fintech LLC, (“Himalayan”), and Centum 

FinTech LLC, a/k/a Sunshines FinTech (“Centum”) (collectively, “Defendants”). 

I.  SUMMARY OF THE ACTION 

1. From at least April 16, 2021 to the present, Krishnan, Shanmugam, and Gounder 

(“Founders”), acting through their controlled “Nanban” companies, have raised at least 

approximately $129.7 million from over 360 investors in fraudulent securities offerings targeting 

members of the Indian community in the DFW-area, including approximately $89.8 million for 

five “Nanban” branded private investment funds that Nanban Ventures offered to retail investors, 

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and $39.9 million from selling high-yield promissory notes to so-called “friends and family” 

investors through GSM, Himalayan, and Centum (“Founder Companies”).   

2. To raise additional investments and keep their fraudulent enterprise afloat, the 

Defendants have been overstating the profitability of the investments and paying investors and 

themselves millions of dollars in fake profits using, in substantial part, other investor funds 

(“Ponzi payments”). 

3. To raise investor funds in the first instance, Defendants made multiple 

misrepresentations and omissions to investors.  Defendants told the fund and note investors that 

they would invest their money using “GK Strategies,” which Krishnan (who goes by “GK”) 

falsely claimed is a proprietary options trading method that never loses money and outperforms 

the stock market.  In reality, Krishnan and the other Founders grossly misrepresented the nature 

and performance of GK Strategies to lure investors.   

4. Defendants also misrepresented the funds’ investments and concealed conflicts of 

interest.  Defendants told investors that the funds would trade using GK Strategies and also 

invest in start-up technology companies and real estate.  Nanban Ventures then provided fund 

investors a statement of investments purporting to show that most of the funds’ assets were 

invested in three “fintech” companies.  “Fintech” refers to companies that use technology to 

improve financial services.  But here, the so called “fintech” companies were actually the 

Founder Companies, which are simply other “Nanban” companies that the Founders control and 

disguised to appear as third-party fintech companies. 

5. In fact, Nanban Ventures and the Founders did not invest the majority of the 

funds’ assets as represented.  Instead, they purportedly invested most of the assets in unsecured 

promissory notes issued by the related-party Founder Companies – companies that are not 

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engaged in fintech business and have little or no assets other than investor funds or assets 

purchased with investor funds.   

6. Nanban Ventures and the Founders also acted as investment advisers to the funds, 

and, therefore, owed a fiduciary duty to the funds.  They blatantly breached this duty by putting 

the Founders’ interests ahead of the funds’ interests, engaging in and profiting from undisclosed 

conflicts of interest, and misusing fund assets in a manner that was inconsistent with the fund 

documents, including by entering into the related-party notes and taking excess compensation.     

7. By their misconduct, Defendants violated the antifraud provisions of the federal 

securities laws.  The SEC brings this action seeking injunctive relief, disgorgement of ill-gotten 

gains plus prejudgment interest, civil penalties, officer and director bars, and all other equitable 

and ancillary relief the Court deems just and proper. 

II.  JURISDICTION AND VENUE 

8. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d), and 

22(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77t(b), 77t(d), and 77v(a)], 

Sections 21(d), 21(e), and 27(a) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 

U.S.C. §§ 78u(d), 78u(e), and 78aa(a)], and Sections 209(d) and 214 of the Investment Advisers 

Act of 1940 (“Advisers Act”) [15 U.S.C. §§ 80b-9(d) & 80b-14].   

9. The limited-partnership units and investment notes offered, purchased, and sold, 

as alleged herein, are securities under Section 2(a)(1) of the Securities Act [15 U.S.C. § 77b] and 

Section 3(a)(10) of the Exchange Act [15 U.S.C. § 78c].   

10. Defendants, directly or indirectly, made use of the means or instrumentalities of 

interstate commerce, the means or instruments of transportation or communication in interstate 

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commerce, and the mails in connection with the transactions, acts, practices, and/or courses of 

business alleged herein.   

11. Venue is proper in this district pursuant to Section 22(a) of the Securities Act [15 

U.S.C. § 77v(a)], Section 27(a) of the Exchange Act [15 U.S.C. § 78aa(a)], and Section 214 of 

the Advisers Act [15 U.S.C. § 80b-14].  Certain of the transactions, acts, practices, and courses 

of business constituting violations of the federal securities laws occurred within this district. 

Defendants also reside and transact business in this district.  

III.  DEFENDANTS 

12. Defendant Krishnan is an individual residing in Frisco, Texas.   

13. Defendant Shanmugam is an individual residing in Frisco, Texas.  

14. Defendant Gounder is an individual residing in Frisco, Texas.  

15. Defendant Nanban Ventures is a Texas limited liability company with its 

principal place of business in Plano, Texas.  The Founders own and control Nanban Ventures 

through intermediary entities, with Krishnan owning 42.5%, Gounder owning 21.25%, 

Shanmugam owning 21.25%, and an additional partner owing 15%. 

16. Defendant GSM is a Texas limited liability company with its principal place of 

business in Plano, Texas.  The Founders own and control GSM through intermediary entities, 

with Krishnan owning 50%, Gounder owning 25%, and Shanmugam owning 25%.  The 

Founders are signatories to GSM’s bank accounts and have access to its brokerage accounts. 

17. Defendant Himalayan is a Texas limited liability company with its principal place 

of business in Plano, Texas.  The Founders control and, upon information and belief, own 

Himalayan through intermediary entities, with Krishnan owning 50%, Gounder owning 25%, 

and Shanmugam owning 25%.  The Founders are signatories to Himalayan’s bank accounts. 

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18. Defendant Centum is a Texas limited liability company with its principal place of 

business in Plano, Texas.  The Founders own and control Centum through intermediary entities, 

with Krishnan owning 50%, Gounder owning 25%, and Shanmugam owning 25%.  The 

Founders are signatories to Centum’s bank accounts and have access to its brokerage accounts. 

IV.  FACTUAL ALLEGATIONS 
 

A. Origin of the Nanban Entities and GK Strategies  

19. “Nanban” is a Tamil word meaning “friend.”   

20. In or around 2020, the Founders began using various “Nanban” branded entities 

to promote what they claim is a propriety and purportedly highly successful options trading 

system called “GK Strategies.”  According to Krishnan, who goes by “GK,” GK Strategies 

encompasses five levels of increasingly complex trading methods.  Krishnan dubbed these 

various levels as “GK Strategies Level One,” “GK Strategies Level Two,” et seq.  

21. Krishnan and the other Founders had careers in the IT industry.  They have little 

or no experience or training in the investment industry.  

22. Before 2020, Krishnan primarily offered his GK Strategies to friends and family 

on an ad hoc basis.  In the spring or early summer of 2020, the Founders launched the first of 

several for-profit hedge funds to employ GK Strategies.     

23. In July 2020, the Founders founded the Nanban Foundation, with the purported 

charitable purpose of helping “Nanbans” achieve financial freedom by teaching GK Strategies 

Levels One and Two.    

24. However, the Nanban Foundation’s primary purpose was to recruit potential 

investors for the hedge funds.  Through word-of-mouth in the DFW-area Indian community, as 

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well as Krishnan’s YouTube videos touting his purported successes using GK Strategies, 

prospective investors connected with the Nanban Foundation.   

25. The Nanban Foundation offered prospective investors free webinars where they 

could learn GK Strategies Levels One and Two.  However, prospective investors were told that 

they would have to invest in Nanban’s hedge funds if they wanted to maximize their returns 

using GK Strategies Levels Three through Five.   

26. From 2020 until approximately September 2021, the Founders raised 

approximately $116.5 million from approximately 395 investors for four successive hedge funds.  

All four hedge funds underperformed the S&P 500 Index.  The last two hedge funds realized 

annual returns that significantly underperformed the S&P 500 index.   

27. Due to the poor performance of the last two hedge funds, many investors 

complained about the returns and requested their money back.  The Founders closed the last two 

hedge funds as a result of the redemption requests and returned the hedge fund investors’ 

original capital, along with a small purported profit.   

28. Unbeknown to investors, these payments to the hedge fund investors were 

sourced, at least in part, from a commingled bank account containing money from other, 

subsequent investors, as alleged further below. 

29. The Founders claim that they have relinquished control of the Nanban Foundation 

to their wives, who are members of Nanban Foundation’s board of directors. 

B. Nanban Ventures and the VC Funds 

30. In March 2021, the Founders formed Nanban Ventures.  Nanban Ventures, as 

alleged in more detail below, is an unregistered investment adviser firm that the Founders and a 

fourth partner own, manage, and control. 

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31. When investors became dissatisfied with the performance of the hedge funds, the 

Founders pivoted from the hedge funds to so-called venture capital funds (“VC Funds”).   The 

VC Funds are private investment funds. 

32. Unlike the hedge funds, Krishnan and other Nanban representatives told investors 

that the VC Funds would generate returns for investors from other investments beyond GK 

Strategies.  The VC Funds would: (1) engage in trading using GK Strategies; (2) invest in start-

up companies, primarily in the technology sector; and (3) make real estate investments.   

33. From approximately May 2021 to July 2023, the Founders, acting through 

Nanban Ventures, raised approximately $89.8 million from over 350 investors (“VC Fund 

Investors”) in multiple states by selling limited partnership units in five VC Funds.  The 

following chart summarizes the offerings: 

VC Fund Raise Period Investors 
Amount 
Raised 

Capital May 11, 2021 – July 18, 2023 105 $25,509,592 

AAA Sept. 17, 2021 – July 18, 2023 99 $5,426,494 

Ganga Dec. 10, 2021– July 18, 2023 95 $19,280,193 

Abundance Dec. 27, 2021 – July 18, 2023 6 $23,325,000 

Nile Aug. 26, 2022 – July 18, 2023 81 $16,266,872 

 Total Raised:  $89,808,151 
 

34. The VC Fund Investors were also offered the opportunity to either receive 

purported profit distributions or reinvest their purported profit distributions back into the VC 

Funds.  Most investors chose to reinvest their purported profits.  VC Fund Investors purchased 

over $12.5 million dollars of additional units in the VC Funds by reinvesting their purported 

profit distributions.   

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35. Through at least July 2023, Nanban Ventures continued to solicit additional 

investments (“top off investments”) from existing VC Fund Investors, whereby the investors 

could buy additional units to add to their existing VC Funds’ investments.   

36. As with the hedge funds, Nanban Ventures obtained VC Fund investors, inter 

alia: (a) through referrals from the Nanban Foundation, and (b) when individuals were routed to 

Nanban Ventures after watching one of Krishnan’s YouTube videos.  Most of the VC Fund 

investors are retail investors that are members of the Indian community in the DFW-area or other 

parts of the United States.  

37. Nanban Ventures is an unregistered investment adviser the Founders formed to 

raise money for, and provide investment advice to, the VC Funds.  Nanban Ventures’ advisory 

clients are the VC Funds.  Similarly, the Founders and the new partner were the designated 

portfolio managers for the VC Funds, and they were the individuals who provided the investment 

advisory services to the VC Funds and selected the investments for the VC Funds.  The Founders 

and the new partner met to discuss and evaluate the performance of the VC Funds and to make 

investment decisions for the funds.      

38. Nanban Ventures and each of the Founders provided investment advice to the VC 

Funds for compensation in the form of a 2% management fee based on the total Assets Under 

Management (“AUM”).  Nanban Ventures and each of the Founders were each engaged in the 

business of advising the VC Funds as to the advisability of investing in, purchasing, or selling 

securities, including when it directed the VC Funds to obtain equity investments in start-up 

companies and to purchase the Related Party Notes (defined and described below).     

39. Krishnan’s investment advice primarily focused on advising the VC Funds 

regarding trading using GK Strategies, with Shanmugam and Gounder also advising in this 

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regard.  Each of the Founders used VC Fund capital to trade using GK Strategies in GSM’s 

brokerage accounts.  Shanmugam also advised the VC Funds about their real estate investments.  

Gounder served as chief investment officer of Nanban Ventures and assisted in vetting start-up 

companies.  The Founders also brought in a new partner to advise on the VC Funds’ investments 

in start-up companies. 

40. The Founders also formed a separate management entity and a general partner 

entity for each fund (except the Capital Fund).  For the Capital Fund, Nanban Ventures served as 

both the management entity and the general partner entity.  The Founders manage and control the 

VC Funds’ management entities and general partners.  

41. The VC Funds were required to pay their respective management entity a 2% 

AUM fee and to pay the general partner entity a share of any profits that exceeded 12-15%.  The 

source of compensation for the Founders and Nanban Ventures included advisory fees that the 

VC Funds paid for investment advisory services, namely, the 2% AUM fee, which the Founders 

and Nanban Ventures received directly or through the VC Funds’ management entities.   

C. The Note Investors 

42. In addition to promoting and soliciting investments in the VC Funds, the 

Founders also offered and sold high-yield promissory notes (“Investment Notes”) to investors 

(“Note Investors”).  One or more of these investors invested in the Investment Notes, because the 

investor did not want to participate in the VC Funds or the earlier hedge funds, but did want to 

make investment returns from GK Strategies.   

43. The Founders sourced the Note Investors through their ties to the Indian business 

community, the Nanban Foundation, or through their previous careers in the IT sector.  Most of 

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the Note Investors are high-net worth individuals in the Indian community or companies they 

control.     

44. Between April 16, 2021 and July 18, 2023, the Founders raised approximately 

$39.9 million in investments from approximately 10 Note Investors through at least 15 

Investment Notes issued by the Founder Companies.  

45. The Investment Notes obligated the issuing Founder Company to make interest 

payments of 18% per year to the Note Investors, usually for a period of five years, in exchange 

for the principal investments. 

46. Krishnan told Note Investors that he would use GK Strategies or other “cash-

flow” strategies to protect their principal while turning a profit.  For example, in approximately 

the Spring of 2020, Krishnan told a Note Investor located in Texas that with GK Strategies, he 

could make 20-25% returns while never losing more than 1-2% of his invested capital.   

47. As another example, in approximately the Spring of 2021, Krishnan told a Note 

Investor also located in Texas that his GK Strategies trading system earned investors annual 

returns of 20-40%.  To avoid paying fees associated with investing in the VC Funds, Krishnan 

recommended that the Note Investor purchase an Investment Note to invest directly in GSM, 

which Krishnan represented made trades using GK Strategies.  

D. The VC Fund Units and the Investment Notes are Securities  

48. Section 2(a)(1) of the Securities Act and Section 3(a)(1) of the Exchange Act 

define “security to include, among other instruments, any “investment contract” or “note.” 

49. The limited-partnership units in the VC Funds are “investment contracts” under 

the Securities Act and the Exchange Act.  Investors invested their money to obtain an investment 

return and the funds were pooled with funds from other investors.  These were entirely passive 

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investments, and investors had no role or say in the operations or management of the VC Funds 

or the underlying fund investments.  The VC Fund Investors were entirely dependent upon, and 

expecting to profit solely from, the Founders’ expertise and efforts to manage the VC Funds and 

to select and manage the funds’ underlying investments.  Moreover, the VC Fund’s offering 

documents specifically identify the limited-partnership units as securities.   

50. The Investment Notes are also securities under the Securities Act and the 

Exchange Act, which specifically include the term “notes” within the definition of securities.  In 

addition, the Investment Notes are “investment contracts.”  Investors invested money to obtain 

fixed investment returns of 18% per year, typically for a period of five years.  The Note 

Investors’ funds were pooled.  The Investment Notes were entirely passive investments, and the 

Note Investors had no role or say in the operations or management of the Founder Companies.  

The Note Investors were entirely dependent upon, and expecting to profit solely from, the 

Founders’ expertise and efforts to trade using GK Strategies.   

51. No registration statements have ever been filed with the SEC or are in effect as to 

any offerings of the limited-partnership units in the VC Funds or the Investment Notes. 

E. Nanban Ventures and the Founders Misrepresented GK Strategies  

52. Defendants made multiple misrepresentations and omissions about GK Strategies 

to the VC Fund Investors and Note Investors.  As alleged in more detail below, the 

misstatements and omissions were made in the VC Funds’ Private Placement Memorandum 

(“PPMs”), in videos and podcasts posted on the internet that remain available online, in investor 

web presentations, and orally to VC Fund Investors and Note Investors.   

53. The Founders and Nanban Ventures made these misstatements and omissions 

about GK Strategies to investors in connection with the offers, purchases, and sales of the 

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limited-partnership units in the VC Funds (including reinvestments therein) and the Investment 

Notes.  The misrepresentations and omissions include the following (emphasis added): 

a. On December 2, 2020, Krishnan represented during a Better Wealth 

Podcast titled Making a Killing With Index, Options, and The Asset with CEO of Nanban 

Investments that was posted and remains available on YouTube that: 

I started sharing with my friends and family my level 1, level 2 
strategies, and I copyrighted all of my five strategies under GK 
Strategies copyright. So first two strategies, level 1, level 2, 
allows people to generate 18 to 30 percent on their own, okay, 
from cash flow perspective.  My level 3, level 4, level 5 takes it to 
a completely different level. We, we consistently generate more 
than a hundred percent in the higher level strategies….in any 
market condition. That’s the beauty, up, sideways, down market. 

So from 2009 till early part of 2020, volatility was low, right? . . . 
And our returns were between 18 to 24 percent still. . . . But with 
this year when volatility increased, you have no idea.  Our people 
are making 60 percent, 70 percent return this year. 

Since 2001, my worst year has been 21 percent up. 

Just to tell you, in private fund we are able to give 58 percent 
return every year.  

But in Nanban Investments, which is our for-profit private fund 
business, let’s say they invest hundred K. So that is their hundred 
K capital into our business.  In the first year we would give them 
$58,000 return. That’s 58 percent return.  That’s what we 
specialize in.  Even though we make more than hundred 
percent, we give 58 percent only to the investors, rest goes to the 
company, and we do a lot of charitable work using that income. 

 
b. The PPMs for the VC Funds represent that Krishnan will use GK 

Strategies to outperform the market, as illustrated by the following statement from the Nanban 

Ventures AAA Fund PPM, which appears in similar form in the other VC Fund PPMs:  

[Krishnan] has been using “GK Strategies” to generate consistent 
returns from US financial market for himself and for his friends 
and family members.     

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As Chief Executive Officer and Portfolio manager of Nanban 
Investments LLC. [Krishnan] is managing the private equity 
fund(s) to generate returns that will consistently over perform 
the S&P 500 Index.  To achieve those kind of returns, 
[Krishnan] will be using his proprietary strategies. 

When asked to explain his claims that GK Strategies over performs the S&P 500 Index, 

Krishnan testified that he told investors that “[a]s long as the S&P 500 doesn’t go to zero, 

my strategy will outperform [the] S&P 500” and do so “[a]ll the time” and “it will beat 

the S&P 500 from cash flow perspective 100 percent of the time.” 

c. On December 21, 2022, Krishnan represented, during an interview titled 

Episode #79 GK’s Way to Financial Freedom featuring Nanban GK that was posted and remains 

available on YouTube, that: 

I don’t even care if the market has dropped by 20 percent because I know every 
month with 100 percent consistency and we will get cash. … So, when you are 
getting cash every week, every month with 100 percent consistency, your second 
bank account will always.  It cannot go down. 
 
…it only takes one hour a week to do my strategies. That’s all because it’s purely 
mechanical. You don’t look at any reports, no indicators, no charts. So, when I 
saw their lifestyle has improved so much because they have got that belief in their 
mind that my 600,000 is going to be safe, and I am making every year 120,000, 
minimum at 20 percent . … And in this market, the current market that is 
going on, the S&P is down 20 percent, volatility has gone up big time, people 
are going to make 40, 50 percent this year…  So that’s the beauty of volatility 
[in our] strategy.   
 

d. On August 9, 2021, Krishnan represented, during an interview on FunAsia 

Radio titled Gopala Krishnan GK | Nanban Interview that was posted and remains available on 

Facebook, that: 

So in 2000 – from 2001 (inaudible) and I figured out that this 
strategy works hundred percent of the time.  I didn’t keep it 
with me because I believe in community growing together. 

 

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From 2001 until now, consistent results... And that is key to 
success. 

So when you are making cash flow every week with 100 
percent consistency, all those amounts would add up to big 
profits later.  

 
e. On November 5, 2021, during an interview titled Gopala “GK” Krishnan, 

Chairman & CEO, Nanban Group of Companies, DotCom Magazine Exclusive Interview that 

was posted and remains available on YouTube, Krishnan represented that: 

So Nanban came into existence just 18 months ago because of the 
strategies called, “GK Strategies,” that I had developed back in 
2001, which had worked for me [and] my family office for many, 
many years, with principal protection and consistent positive 
returns in any market conditions. 

 
f. On January 31, 2023, Krishnan represented during a Nanban Growth Fund 

webinar made available online to potential investors that: 

So, it’s a very, very diversified strategy that has been working in 
Nanban Ventures and Nanban Ventures has delivered for the 
last 18 months consistent double-digit returns. 

 
g. On May 19, 2023, Krishnan represented during a telephone call with a 

potential investor that: 

If you only want to participate in GK Strategies, that is our Nanban 
Hedge Fund where the minimum now is $100 million … that is 
where we apply level 1 to level 5 all the strategies to generate 
around 30% every year that is what our goal is through our Nanban 
Hedge Fund.  And then we have the next best is Nanban Ventures 
where 60% of the capital goes to GK strategies, 20% goes to all 
kinds of real estate, and only 20% goes to all kinds of startups…. 
So our people are getting returns every year…. Our investor, who 
put $10 million is getting minimum, you know, around 20% a year.  

 

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What I meant in this podcast was, I think in 2020, the volatility in 
the market was very high. So GK strategy itself, would have 
generated 50, 60, 70% [e]very year instead of 20, 30%. 

 
h. In the spring of 2020, Krishnan told a Note Investor in Texas during a 

webinar that GK Strategies Levels One and Two would earn double-digit returns of 20-25 

percent while at the same time being a conservative investment strategy that protected investor 

capital.  He told the investor that GK Strategies would never lose more than 1-2 percent of an 

investor’s capital and that his system always beat the stock market and an index like the S&P 

500.  Krishnan also told the investor that if he wanted to earn even higher returns from GK 

Strategies Levels Three, Four, and Five, he would have to invest directly with Krishnan and 

could earn an extra 5-15 percent in annual returns. 

i. On October 19, 2022, Krishnan represented during a Global Summit 

webinar made available online to potential investors that: 

So everything goes back to, within Nanban, Nanban is powered by 
GK Strategies…. It’s after my name. And it’s copyrighted and 
patented in U.S. So we use those strategies to make money. 

54. The statements in paragraph 53 are false and misleading, because GK Strategies is 

not “proprietary,” “copyrighted,” “patented,” or even “unique.”  There is no algorithm or other 

proprietary technology or method underpinning GK Strategies.  GK Strategies is merely a 

covered call option investment strategy with put protection.  This is a widely known and publicly 

available technique. 

55. The statements in paragraph 53 are also false and misleading, because GK 

Strategies does not consistently outperform the S&P 500 index, which is a proxy for the public 

stock market.  To the contrary, GK Strategies only does so in limited market scenarios.  

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56. The statements in paragraph 53 are also false and misleading, because GK 

Strategies does not always generate positive returns, and there are market conditions where GK 

Strategies generates negative returns.   

57. The statements in paragraph 53 are also false and misleading, because, at the time 

they were made, GK Strategies had not consistently outperformed the S&P 500 index or 

obtained the high percentage returns that Krishnan claimed.  Trading records demonstrate that 

GK Strategies has not produced returns consistently exceeding the returns of the S&P 500 index.  

To the contrary, the returns were, with limited exceptions, lower than the returns of the S&P 500 

index, lower than the percentage returns that Krishnan claimed, and negative on numerous 

occasions.       

58. The statements in paragraph 53 are also false and misleading, because the 

Founders and Nanban Ventures omitted (a) their actual returns using GK Strategies and (b) that 

two Nanban hedge funds—which used GK Strategies—were closed, in part, due to investor 

complaints about poor performance.  These omissions were highly misleading in light of the 

other statements that the Founders and Nanban Ventures made about the performance of GK 

Strategies.  

59. Nanban Ventures also falsely told hedge fund investors—that they were also 

soliciting to invest in the VC Funds—that they were offering an exit to the hedge funds, because 

they could not fully deploy GK Strategies to protect intellectual property while they were under 

an SEC review.   In fact, the hedge funds were actually closed because investors asked for their 

money back due to the hedge funds’ poor performances, not to protect intellectual property in 

connection with an “SEC review” or otherwise. 

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60. The Founders and Nanban Ventures made the misstatements and omissions 

alleged above.  As described above, Krishnan made most of the statements himself, and the other 

Founders also participated in one or more in-person meetings with Note Investors in which the 

misrepresentations were made.  All of the Founders and Nanban Ventures made the statements in 

the PPMs, because each of the Founders reviewed and approved the PPMs and they each had 

final authority over the contents of the PPMs.   

61. The Founders knew, or were severely reckless in not knowing, that their 

statements and omissions about GK Strategies were false and misleading.  The Founders made 

trades using GK Strategies in the hedge funds both independently and in concert.  Therefore, the 

Founders knew, or was severely reckless in not knowing, that GK Strategies did not perform as 

represented in the hedge funds.  They perpetuated this misrepresentation when they authorized 

VC Fund Investors to receive PPMs claiming that Krishnan would apply proprietary strategies 

that would generate returns that would consistently over perform the S&P 500 Index.  

Additionally, the Founders all knew that the last two Nanban hedge funds were closed due to the 

poor performance of GK Strategies.  The Founders were also severely reckless because they did 

not analyze Krishnan’s historical trading performance using GK Strategies prior to including the 

claim that the “proprietary strategies” would consistently over perform the S&P 500 Index in the 

VC Funds’ PPMs.    

62. These misrepresentations and omissions were material, because a reasonable 

investor would consider the fact that GK Strategies was not unique and did not have investment 

returns as represented in deciding whether to invest.   

F. Defendants Misrepresented Profits Earned and Misused Investor Funds 

63. After Defendants induced investors to purchase the VC Fund units and the 

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Investment Notes based on their false narrative of Krishnan’s investing success, they 

misrepresented the performance of those investments (VC Funds and Investment Notes) and 

misused investor funds to induce additional investments and to keep their fraudulent enterprise 

afloat.  In particular, Defendants misused investor funds by using at least approximately $17.8 

million of investor funds to make Ponzi payments—purported profit distributions to investors 

using, in substantial part, other investor funds.   

i. Profitability Misstatements to VC Fund Investors 

64. The Limited Partnership Agreement (“LPA”) for each VC Fund provides that 

investors are entitled to receive profit distributions if there is a positive net amount resulting 

from the allocation of profit and loss.  The LPAs further provide that the VC Fund Investors may 

elect to take distributions of their share of these profits in cash or to reinvest the amount back 

into the respective VC Funds in exchange for additional units.   

65. Nanban Ventures consistently represented to the VC Fund Investors at investor 

update webinars that all the Founders typically attended that the VC Funds were highly 

profitable.  In total, between April 16, 2021 and July 18, 2023, Nanban Ventures, through its 

third-party fund administrator, told VC Fund Investors that the VC Funds had generated 

approximately $23.2 million in purported profits.  

66. In a webinar with investors in or around January 2023, Nanban Ventures, at the 

Founders’ direction, provided the VC Fund Investors with a Schedule of Investments (“SOI”) 

purportedly showing that the VC Funds had achieved profits of approximately $10 million in the 

second half of 2022.   

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67. As alleged at paragraph 53 above, on a May 19, 2023 telephone call, Krishnan 

also represented to a potential investor  that VC Fund investors were receiving minimum returns 

of 20% per year every year. 

68. As another example, during a July 7, 2023 Nanban Ventures Fund Performance 

Review Webinar, Nanban Ventures’ CFO represented to VC Fund Investors that the VC Funds 

had achieved profits of approximately $10.3 million from January 2023 to June of 2023 from the 

“fintechs” alone.   

69. Believing the VC Funds to be highly profitable, most investors chose to reinvest 

their share of purported profits in the VC Funds.   

70. A smaller subset of investors chose to receive their share of purported profits as 

cash distributions.  Between April 16, 2021 and July 18, 2023, the Founders caused the VC 

Funds to make purported profit payments of approximately $10.7 million to those investors.  

These payments were themselves a representation of the VC Funds’ purported profitability. 

71. The Founders also made interest payments to the Note Investors, including 

interest payments that, at times, exceeded the 18% amount listed on the face of the Investment 

Notes.  These payments were purportedly based on GK Strategies’ trading profits exceeding 

18%.  The interest payments to the Note Investors were, themselves, deceptive acts and false 

representations of profitability to the Note Investors. 

72. Defendants’ representations about the profitability of the VC Funds and 

Investment Notes were false and misleading.  When the statements were made, the VC Funds 

had not achieved the represented profits.  In fact, the VC Funds could not have achieved the 

represented profits because the VC Funds achieved, at most, only $1.97 million in profits during 

the entire period of April 16, 2021 through July 18, 2023, most of which was actually derived 

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from the sale of real estate.  This amounts to a return of only 2.2%.  During the same period, the 

Founder Companies suffered a net trading loss, and therefore did not have trading profits to 

support payments to Note Investors, let alone payments that exceeded 18%.     

73. As alleged below, any other purported profits were illusory.  Specifically, any 

other so-called profits to the VC Funds were not investment profits from fund investments in GK 

Strategies, start-up companies, or real estate.  Instead, they were merely interest payments on 

related-party promissory notes entered into between the Founder Companies and other 

companies the Founders controlled.   

ii. Ponzi Payments to VC Fund, Note, and Hedge Fund Investors    

74. Between April 16, 2021 and July 18, 2023, the Founders and Nanban Ventures 

caused the VC Funds to pay approximately $10.7 million dollars to VC Fund investors who 

chose to receive purported profit distributions instead of reinvesting their profits.   

75. Between April 16, 2021 and July 18, 2023, the Founders caused the Founder 

Companies to pay approximately $21.04 million in interest payments and return of principal to 

Note Investors.  

76. At least approximately $17.8 million of these payments to VC Fund Investors and 

Note Investors (as alleged in the previous two paragraphs) were Ponzi payments that were 

sourced with funds from other investors. 

77. Additionally, in August 2022, the Founders closed out their two remaining hedge 

funds and purported to return the hedge fund investors’ principal with a small amount of profit.  

In reality, the hedge funds did not have enough money in their account to make these.  Instead, 

the Founders caused the Founder Companies to pay approximately $3.5 million to the hedge 

fund investors using investor funds received from the VC Fund Investors and the Note Investors.  

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At least approximately $2.3 million of this $3.5 million was paid to hedge fund investors after 

the hedge funds had ceased operations.  Consequently, the hedge fund investors received $2.3 

million in Ponzi payments. 

 d.   Improper Payments to the Founders and Nanban Ventures    

78. Defendants also misused investor funds to compensate the Founders.  The PPMs 

disclose to the VC Fund Investors that the Founders, through related entities, would make money 

in two ways: (a) a 2% AUM fee, and (b) the general partner of the VC Fund’s share of any 

profits that exceeded 12-15%.   

79. The Founders did not disclose to Note Investors that they would take any portion 

of their principal investments for themselves, and at least one Note Investor in Texas specifically 

invested in an Investment Note and not a VC Fund to avoid paying AUM and general partner 

fees.  

80. Yet, between July 29, 2021 and June 20, 2023, the Founders, acting through the 

Founder Companies, paid themselves at least approximately $6 million from commingled 

investor funds, including payments of approximately $3.3 million to Krishnan, $1.8 million to 

Gounder, and $900,000 to Shanmugam.  In addition, the VC Funds transferred approximately $2 

million in compensation to the VC Funds’ general partner entities and management entities, 

including Nanban Ventures.  These payments were not authorized by the VC Funds’ documents 

and were also made, at least in substantial part, using investor funds. 

81. Defendants knew, or were severely reckless in not knowing, that their 

misstatements and omissions about the profitability of the investments were false and misleading 

and that they were misusing investor funds.  The Founders oversaw the investments for the VC 

Funds and the Founder Companies, participated in meetings about the status of the investments, 

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and controlled the relevant bank accounts.  As a result, the Founders knew, or were severely 

reckless in not knowing, that the VC Funds and Founder Companies were vastly overstating their 

profits.  The Founders likewise knew that they were commingling investor funds and using 

investor funds to pay false profit distributions and themselves.  

82. As alleged at paragraphs 37-39 above, the Founders and Nanban Ventures are 

investment advisers to the VC Funds.  They breached their fiduciary duty to the VC Funds by 

using fund assets in a manner that was not authorized by the VC Funds’ documents, including 

the operative PPMs and limited partnership agreements. 

83. The misuse of investor funds and the related misstatements and omissions are 

material, because a reasonable investor would consider the facts that they were receiving 

purported profit payments that were actually sourced from other investors’ funds and that their 

investment was not profitable, or at best significantly less profitable than represented, important 

in deciding whether to invest or reinvest.      

G. Defendants Misrepresented the Investments and Hid Self-Dealing 

i. The Fake “Fintech” Companies  

84. During a biannual investment meeting in or about January 2023, Nanban 

Ventures, at the Founders’ direction, provided investors with the Statement of Investments (as 

previously defined, “SOI”). 

85. The SOI represented that the VC Funds had invested $56 million (over 69% of the 

VC Funds’ total assets) into three purported “fintech” companies identified as “NorthStars 

FinTech,” “Himalayan FinTech,” and “Sunshines FinTech.”  The SOI stated that these fintech 

investments had generated revenue of over $8 million for the VC Funds.  Many VC Fund 

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investors reinvested their purported profits to purchase additional VC Fund units after receiving 

the SOI.       

86. “NorthStars FinTech” (which is an assumed name for Defendant GSM), 

“Himalayan FinTech” (which is Defendant Himalayan), and “Sunshines FinTech” (which is an 

assumed name for Defendant Centum) are not third-party companies.  These are the Founder 

Companies, and they are all entities controlled by the Founders.  The Founders’ control of these 

entities was not disclosed to investors.   

87. The Founder Companies are also not fintech companies.  GSM is a company that 

the Founders use to trade investor funds using GK Strategies, to issue Investment Notes, to make 

false profit distributions, and, in some instances, to purchase real estate.  Centum is an 

intermediary entity that the Founders use to issue Investment Notes, to shuttle investor funds to 

GSM, to make false profit distributions, and, in some cases, to purchase bonds and real estate.  

Himalayan is an intermediary entity that the Founders use to issue Investment Notes, to shuttle 

investor funds to GSM and Centum, and to make false profit distributions.   

88. The Founder Companies are not engaged in the development of specific 

technologies used to enhance financial services, or engaged in any other activity that would 

characterize the entity as a fintech company.   

89. The Founder Companies have substantially no assets other than investor funds or 

assets purchased with investor funds.        

90. The Founder Companies are, in essence, undercapitalized companies that engage 

in no business other than receiving investor funds and trading or investing on behalf of the 

Founders using investor funds.  There were no fintech investments.    

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ii. The Related Party Notes 

91. The VC Funds did not use investor funds to trade using GK Strategies as 

represented.  Instead, Defendants structured the VC Funds’ purported GK Strategies investments 

as a series of unsecured investment loans (“Related Party Notes”) evidenced by approximately 

10 convertible promissory notes between the Founder Companies (as payors) and another VC 

Fund-related intermediary that the Founders also controlled (as payees).   

92. The Related Party Notes totaled more than $70 million dollars, which includes the 

$56 million falsely referenced in the SOI as fintech investments. 

93. The Founders commingled investor funds from all VC Fund Investor funds in one 

bank account, and then further commingled the funds in the bank accounts of various special 

purpose entities that the Founders controlled.   

94. From there, the Founders, using the Related Party Notes, transferred more than 

$70 million dollars of VC Fund Investor funds to the Founder Companies where the funds were 

commingled with Note Investor funds. 

95. The Related Party Notes, which were not disclosed to investors, purportedly 

require the Founder Companies to pay 18% biannual interest to the intermediary Nanban 

companies, typically over a term of five years.  The Related Party Notes do not give the VC 

Funds any ownership stake in the underlying companies or their investments.   

96. The Founders also take the position that the Founder Companies are only required 

to pay interest on these Related Party Notes on a “best efforts basis.”   

97. Even if the Founder Companies or their investments are highly profitable, and the 

Founder Companies choose to pay the interest (because they apparently claim that it is not 

required), the VC Funds’ profits are purportedly capped at 18%.  Meanwhile, the VC Fund 

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Investors have no protection if these uncapitalized entities fail to pay off the Related Party Notes, 

which are unsecured.  

98. As a result, more than 78% of the VC Funds assets were deployed to the Related 

Party Notes.  Nanban Ventures and the Founders used the Related Party Notes to create the false 

appearance of investment profit. 

99. The Founders and Nanban Ventures did not disclose—and in fact actively 

concealed using assumed names—that the so-called fintech companies were the Founders’ 

controlled entities and were not fintech companies.  The Founders and Nanban Ventures also did 

not disclose that the investments in the Founder Companies were loans, much less related-party 

loans.  The Founders and Nanban Ventures further failed to disclose that most of the VC Funds’ 

capital was deployed to these purported Related Party Notes.   

100. In addition to the SOI used to deceive VC Fund Investors, Krishnan also 

attempted to mislead a potential VC Fund Investor in a January 31, 2023 investor pitch.  During 

that investor pitch, Krishnan did not disclose his ownership or control of the Founder 

Companies, the loan structure, or that profits were tied to GK Strategies. Rather, Krishnan stated 

generically that Nanban Ventures was invested in “some very strategic private companies that 

are already producing cash flow.” Krishnan further gave the impression that the companies were 

arms-length third parties by stating, “[t]hey don’t want to go public, but they all have been 

generating really good cash flow. They are allowing us to participate in their company.”  

101. The Founders and Nanban Ventures knew, or were severely reckless in not 

knowing, that their misstatements and omissions about the VC Funds’ investments were false 

and misleading.  The Founders knew that they controlled the Founder Companies, and that these 

companies were neither independent third-party companies nor fintech companies.  The 

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Founders also met regularly to discuss the VC Funds’ investments, so they knew, or were 

severely reckless in not knowing, that investor funds were being used to fund the purported loans 

between Nanban entities.  Gounder signed most or all Related Party Notes on behalf of GSM.   

102. As alleged at paragraphs 37-39 above, the Founders and Nanban Ventures are 

investment advisers to the VC Funds.  They breached their fiduciary duties to the VC Funds by, 

among other things, entering into the Related Party Notes, which were not in the VC Funds’ best 

interest, and by failing to fully and fairly disclose that the VC Funds were investing in the 

Founder Companies.     

103. The misstatements and omissions about the VC Funds’ investments were 

material, because a reasonable investor would consider the existence of a conflict of interest and 

the fact that their investment funds had not been invested as represented important in deciding 

whether to invest.   

104. The Related Party Notes are securities under the Securities Act and the Exchange 

Act, which specifically include the term “notes” within the definition of securities.  In addition, 

the Related Party Notes are “investment contracts.”  The VC Funds, through related entities, 

invested money to obtain fixed investment returns of 18% per year, typically for a period of five 

years.  The VC Funds money was pooled with funds from other VC Funds and Note Investors.  

The VC Funds were entirely dependent upon, and expecting to profit solely from, the Founders’ 

expertise and efforts to trade using GK Strategies.   

105. The Founders owned and controlled Nanban Ventures and each of the Founder 

Companies.  Acting as a principal for their own accounts, the Founders sold the Related Party 

Notes to their advisory clients, the VC Funds. 

106. Before the completion of the transactions in which the Founders sold the Related 

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Party Notes, the Founders did not: (a) disclose the transactions in writing to their clients, (b) 

disclose the capacity in which they were acting, and/or (c) obtain the consent of the clients to 

engage in such transactions. 

H. Krishnan Misrepresented Nanban Ventures’ AUM 

107. To convince investors to invest in the VC Funds, Krishnan made several 

additional misrepresentations to investors about Nanban Ventures’ purported size and AUM: 

a. On December 2, 2020, during a Better Wealth Podcast titled Making a 

Killing With Index, Options, and The Asset with CEO of Nanban Investments that was posted and 

remains posted on YouTube, Krishnan nodded in agreement when asked by the interviewer, 

“within less than a year, you guys have raised over $950 million?”   

b. In February 2021, during a YouTube video titled How GK financial 

strategy won more than 25,000 people’s confidence? that was posted a year after the Nanban 

financial organization came into existence, Krishnan represented that Nanban was “almost a $1.2 

billion company.”   

c. In an undated interview posted on the Investment Fund Secrets (IFS) 

“Fund Launch” website and titled Investment Fund Secrets, Krishnan represented that “[w]e 

have gone from zero to $2.5 billion in 17 months.”   

d. On October 19, 2022, during an IBC Tamil TV interview titled Global 

Summit of Tamil Entrepreneurs & Professionals – Mr. Nanban GK Interview that was posted 

and remains available on YouTube, Krishnan represented that “all the six divisions that we have 

is worth INR 96,000 crores [960,000,000,000 Indian Rupees] ($11.5 billion).”   

108. These statements are false and misleading.  At the times that the statements were 

made, the Nanban-related companies never had more than $130 million in AUM.  On some of 

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the dates that the statements were made, the AUM was significantly less.  Krishnan knew, or was 

severely reckless in not knowing, that the statements were false, because he had direct 

knowledge of the actual size of the assets he managed.  The misstatements identified in 

paragraph 107 above were material, because a reasonable investor would find it important in 

making an investment decision to know that his or her investment adviser was grossly 

overstating the size, success, and bona fides of its business. 

I. Defendants Are Engaged in an Ongoing Fraud 

a.  Ongoing Offerings 

109. Defendants continue to offer and sell securities.  In 2023, the Founders sought to 

expand their operations globally and began soliciting international investors from the United 

Kingdom, Singapore, India, and the Gulf region to invest in the VC Funds.  As recently as July 

2023, Nanban Ventures launched a new venture capital fund called the Eco Harmony Fund LP.  

Upon information and belief, that offering is ongoing. 

110. At least as late as July 2023, Nanban Ventures continued to solicit current fund 

investors by offering them the option to reinvest purported profit distributions in the VC Funds 

or to make additional “top off” investments to buy additional units in the VC Funds.  Further, a 

Note Investor deposit and a VC Fund Investor deposit was made at least as recently as July 12, 

2023 and July 14, 2023, respectfully.  

  b.  The Compliance Email and Acknowledgement Form  

111. During the SEC’s investigation that preceded the filing of this action, Defendants 

learned that the SEC had discovered that (a) the so-called “fintech” companies were not fintech 

companies and were related-party companies disguised as third-party companies, and (b) 

Defendants used the Related Party Notes to create the false appearance of investment profit.   

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112. Thereafter, on or about August 9, 2023, Nanban Ventures emailed all VC Fund 

Investors (“Compliance Email”).    The Compliance Email states that a forthcoming 

acknowledgment form (“Acknowledgement Form”) was part of a “formal compliance process, [] 

to ensure that all [VC Fund] investors have a clear understanding of how earnings are derived.”   

113. The Acknowledgement Form purports to require investors to affirm that Nanban 

Ventures previously disclosed to them that the Founders owned and controlled the so-called 

fintech companies, which the VC Funds purportedly invested in “through debt notes to portfolio 

companies to generate minimum interest/return of 18% per year on a best effort basis [and] 

[u]sing proprietary cash flow strategies on market indices and bonds, Nanban Ventures invests 

through these companies (Centum FinTech LLC, Himalayan FinTech LLC and Sunshine 

FinTech LLC etc.) to provide semi-annual non-guaranteed earnings.”   

114. The Compliance Email and the Acknowledgement Form are false and misleading 

and are more deceptive acts in furtherance of Defendants’ ongoing scheme to defraud.  

Defendants did not disclose the Founders’ control of the Founder Companies, the Related Party 

Notes, or the loan terms when the VC Fund Investors invested or reinvested in the VC Funds 

and, if at all, only after Defendants became aware of the SEC raising this issue during its 

investigation.   

115. The Acknowledgement Form also contains misrepresentations and omissions 

about the so-called loan investments.  The Acknowledgement Form:   

a. falsely claims that the notes have minimum interest of 18%, when in fact 

interest is capped at a stated percentage; 

b. states that interest on the notes will only be paid on a “best effort basis,” 

when the face of the notes had no such qualification; 

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c. fails to disclose the trading losses that the Founder Companies have 

incurred from GK Strategies trading.   

116. Defendants knew that these disclosures were not previously made in the manner 

represented in the Acknowledgement Form.  In fact, Krishnan has previously admitted under 

oath that investors were not aware of the loans or their terms.  Defendants are using the 

Compliance Email and Acknowledgement Form as deceptive devices, are falsely leading 

investors to believe they must sign the letter or potentially risk their investment, and are 

potentially causing investors to unknowingly comprise claims.   

V.  CLAIMS FOR RELIEF 
 

FIRST CLAIM FOR RELIEF 

Violations of the Antifraud Provisions of the Exchange Act 
Exchange Act Section 10(b) and Rule 10b-5 thereunder 

 
Against all Defendants 

 
117. The SEC incorporates by reference each and every allegation contained in 

paragraphs 116 above.   

118. By engaging in the conduct alleged above, Krishnan, Shanmugam, Gounder, 

Nanban Ventures, GSM, Centum, and Himalayan, directly or indirectly, in connection with the 

purchase or sale of securities, by the use of any means or instrumentality of interstate commerce, 

or of the mails or of any facility of any national securities exchange, knowingly or with severe 

recklessness:   

a. employed a device, scheme, or artifice to defraud; and/or  

b. made an untrue statement of a material fact, or omitted to state a material 

fact necessary in order to make the statements made, in light of the 

circumstances under which they were made, not misleading; and/or  

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c. engaged in an act, practice, or course of business which operated or would 

operate as a fraud or deceit upon any person.   

119. By reason of the foregoing, Krishnan, Shanmugam, Gounder, Nanban Ventures, 

GSM, Centum, and Himalayan have violated, and unless enjoined will continue to violate, 

Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 

240.10b-5]. 

SECOND CLAIM FOR RELIEF 

Violations of the Antifraud Provisions of the Securities Act 
Securities Act Section 17(a)  

 
Against all Defendants 

 
120. The SEC incorporates by reference each and every allegation contained in 

paragraphs 116 above. 

121. By engaging in the conduct alleged above, Krishnan, Shanmugam, Gounder, 

Nanban Ventures, GSM, Centum, and Himalayan directly or indirectly, in the offer or sale of 

securities, by the use of the means or instruments of transportation or communication in 

interstate commerce or by use of the mails, have:  

a. knowingly or with severe recklessness employed a device, scheme, or 

artifice to defraud; and/or  

b. knowingly, recklessly, or negligently obtained money or property by 

means of an untrue statement of a material fact or an omission to state a 

material fact necessary in order to make the statements made, in light of 

the circumstances under which they were made, not misleading; and/or  

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c. knowingly, recklessly, or negligently engaged in a transaction, practice, or 

course of business which operated or would operate as a fraud or deceit 

upon the purchaser.  

122. By reason of the foregoing, Krishnan, Shanmugam, Gounder, Nanban Ventures, 

GSM, Centum, and Himalayan have violated, and unless enjoined will continue to violate, 

Section 17(a) of the Securities Act [15 U.S.C. § 77q]. 

THIRD CLAIM FOR RELIEF 

Violations of the Antifraud Provisions of the Advisers Act 
Advisers Act Sections 206(1) and (2) 

 
Against Defendants Krishnan, Shanmugam, Gounder, and Nanban Ventures 

 
123. The SEC incorporates by reference each and every allegation contained in 

paragraphs 116 above. 

124. By engaging in the conduct alleged above, Krishnan, Shanmugam, Gounder, and 

Nanban Ventures, directly or indirectly, by the use of the mails or any means or instrumentality 

of interstate commerce, while acting as investment advisers within the meaning of Section 

202(a)(11) of the Advisers Act [15 U.S.C. § 80b-2(a)(11)], have: (a) employed a device, scheme, 

or artifice to defraud a client or prospective client; and/or (b) engaged in a transaction, practice, 

or course of business which operated as a fraud or deceit upon a client or prospective client.  

125. With regard to the violations of Section 206(1) of the Advisers Act, Krishnan, 

Shanmugam, Gounder, and Nanban Ventures engaged in the conduct intentionally or with severe 

recklessness.  With regard to the violations of Section 206(2), Defendants Krishnan, 

Shanmugam, Gounder, and Nanban Ventures engaged in the conduct at least negligently. 

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126. By reason of the foregoing, Krishnan, Shanmugam, Gounder, and Nanban 

Ventures have violated, and unless enjoined will continue to violate, Sections 206(1) and (2) of 

the Advisers Act [15 U.S.C. §§ 80b-6(1), (2)]. 

FOURTH CLAIM FOR RELIEF 

Violations of Section 206(3) of the Advisers Act  
 

Against Defendants Krishnan, Shanmugam, Gounder, and Nanban Ventures 

127. The SEC incorporates by reference each and every allegation contained in 

paragraphs 116 above. 

128. By engaging in the conduct alleged above, Krishnan, Shanmugam, Gounder, and 

Nanban Ventures, directly or indirectly, by the use of the mails or any means or instrumentality 

of interstate commerce, while acting as investment advisers within the meaning of Section 

202(a)(11) of the Advisers Act [15 U.S.C. § 80b-2(a)(11)], each acted as principal for its/his own 

account, knowingly to sell securities (promissory notes) to or purchase securities from clients—

or knowingly to effect sales or purchases of securities for the account(s) of such client, without 

disclosing to such clients in writing before the completion of such transactions the capacities in 

which they were acting and obtaining the consent of the clients to such transactions. 

129. By reason of the foregoing, Krishnan, Shanmugam, Gounder, and Nanban 

Ventures have violated, and unless enjoined will continue to violate, Section 206(3) of the 

Advisers Act [15 U.S.C. § 80b-6(3)]. 

FIFTH CLAIM FOR RELIEF 

Violations of Section 206(4) of the Advisers Act and Rule 206(4)-8 Thereunder 
 

Against Defendants Krishnan, Shanmugam, Gounder, and Nanban Ventures 
 

130. The SEC incorporates by reference each and every allegation contained in 

paragraphs 116 above. 

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131. By engaging in the conduct alleged above, Krishnan, Shanmugam, Gounder, and 

Nanban Ventures, directly or indirectly, through the use of the mails or any means or 

instrumentality of interstate commerce, while acting as investment advisers within the meaning 

of Section 202(a)(11) of the Advisers Act [15 U.S.C. § 80b-2(a)(11)], engaged in an act, 

practice, or course of business that was fraudulent, deceptive, or manipulative. 

132. The VC Funds are “pooled investment vehicles” as defined in Rule 206(4)-8(b) 

[17 C.F.R. § 275.206(4)-8(b)]. 

133. While acting as investment advisers to the VC Funds, Krishnan, Shanmugam, 

Gounder, and Nanban Ventures: (a) made an untrue statement of a material fact or omitted to 

state a material fact necessary to make the statements made, in light of the circumstances under 

which they were made, not misleading, to an investor or prospective investor in the Fund; and/or 

(b) engaged in an act, practice, or course of business that was fraudulent, deceptive, or 

manipulative with respect to an investor or prospective investor in the Fund.   

134. As a result, Krishnan, Shanmugam, Gounder, and Nanban Ventures have violated, 

and unless enjoined will continue to violate, Section 206(4) of the Advisers Act [15 U.S.C. § 

80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8]. 

VI.  JURY TRIAL DEMAND 

The SEC demands a trial by jury on all issues that may be so tried. 

VII.  RELIEF REQUESTED 

Therefore, the SEC respectfully requests that this Court: 

(a) Permanently enjoin all Defendants from violating Section 17(a) of the Securities 

Act [15 U.S.C. § 77q], and Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 

10b-5 thereunder [17 C.F.R. § 240.10b-5]; 

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(b) Permanently enjoin Krishnan, Shanmugam, Gounder, and Nanban Ventures from 

violating Sections 206(1), (2), (3), and (4) of the Advisers Act [15 U.S.C. §§ 80b-6(1), (2), (3), 

and (4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8]; 

(c) Permanently enjoin all Defendants from participating in the issuance, purchase, 

offer, or sale of any security, whether directly or indirectly, including, but not limited to, through 

any entity owned or controlled by them, provided, however, that such injunctions shall not 

prevent each of Krishnan, Shanmugam, and Gounder from purchasing or selling securities for his 

own personal accounts;  

(d) Order, pursuant to Section 20(e) of the Securities Act [15 U.S.C. § 77t(e)] and 

Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)], that Krishnan, Shanmugam, and 

Gounder be prohibited from acting as an officer or director of any issuer that has a class of 

securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l] or that is 

required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)];  

(e) Order Defendants to disgorge all ill-gotten gains obtained as a result of the 

conduct described herein, plus prejudgment interest thereon, pursuant to Exchange Act Sections 

21(d)(3), 21(d)(5), and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7)]; 

(f) Order Defendants to pay civil penalties pursuant to Section 20(d) of the Securities 

Act [15 U.S.C. § 77t(d)], Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)], and, 

with respect to Krishnan, Shanmugam, Gounder, and Nanban Ventures, Section 209(e) of the 

Advisers Act [15 U.S.C. § 80b-9(e)];  

(g) Grant such further relief as this Court may deem just and proper. 

  

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Dated: October 5, 2023 Respectfully submitted, 

/s/ Keefe Bernstein 
Keefe Bernstein 
Texas Bar No. 24006839 
(817) 900-2607
[email protected]

Jason P. Reinsch 
Texas Bar No. 24040120 
Direct Phone:  (817) 900-2601 
[email protected] 

Samantha Martin 
Texas Bar No. 24065090 
(817) 978-5035
[email protected]

Clemon Ashley 
Illinois Bar No. 6294839 
(817) 900-2627
[email protected]

Securities and Exchange Commission 
801 Cherry Street, Suite 1900 
Fort Worth, TX 76102 

Counsel for Plaintiff 
Securities and Exchange Commission 

L.R. CV-5(a)(7) Certification

In accordance with L.R. CV-5(a)(7), I certify that a Motion to Seal the forgoing 
document has been filed. 

/s/ Keefe Bernstein 
Keefe Bernstein 

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