2026-01-29 sec-litreleases complaint 308 KB 37,115 chars

SEC v. Satish Appalakutty; Lorven Funds; and Lorven Advisors LLC, No. 3:26-cv-00917, Northern District of California (Jan. 29, 2026) — Complaint

raw: Securities and Exchange Commission v. Appalakutty Et Al.

Securities and Exchange Commission v. Appalakutty Et Al., No. 3:26-cv-00917 (Jan. 29, 2026)

Caption: Securities And Exchange Commission v. Appalakutty

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Scheme: ponzi (99%)
Court: Northern District of California
Case No.: 3:26-cv-00917
Victim loss: $6,700,000
Victims: 100
Entity: Satish Appalakutty

Classified ponzi(confidence 99%). EDGAR detection: forms Form D· recall 35% / precision 15%. detection rule →

Extracted insights

Dollar amounts 22

$37.00M $37 million $10M–$100M
$6.70M $6.7 million $1M–$10M
$4.40M $4.4 million $1M–$10M
$4.10M $4.1 million $1M–$10M
$2.30M $2.3 million $1M–$10M
$700K $700,000 $100K–$1M
$700K $700,000 $100K–$1M
$425K $425,000 $100K–$1M
$415K $415,000 $100K–$1M
$400K $400,000 $100K–$1M
$300K $300,000 $100K–$1M
$240K $240,000 $100K–$1M

Entities 5

company approximately $4.4 million for his software startup vistalytics inc.
person repaying investors
person satish appalakutty
company satish appalakutty, lorven funds, and lorven advisors llc
agency Securities and Exchange Commission

Triples 17

Satish Appalakutty, Lorven Funds, and Lorven Advisors LLC orchestrated a Ponzi-like scheme
Defendants raised at least $37 million from at least 100 investors
Defendants made numerous material misrepresentations and omissions about three different types of investment opportunities
Defendants falsely told investors that they would use investor funds to acquire stocks of prominent public companies at a discount in Secondary Public Offering transactions
Defendants falsely promised exceedingly high and guaranteed rates of return
Defendants did not purchase any stocks of public or pre-IPO companies
Defendants used new investors’ money to pay promised returns to prior investors
Satish Appalakutty misappropriated approximately $6.7 million of investor money for his own personal benefit
Satish Appalakutty used approximately $4.4 million for his software startup Vistalytics Inc.
Defendants were unable to raise funds quickly enough to pay the returns they had promised
Defendants stopped repaying investors
Defendants violated the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934
Securities and Exchange Commission seeks permanent injunctions against all three Defendants
Securities and Exchange Commission seeks conduct-based injunctions prohibiting Defendants from participating in the issuance, purchase, offer, or sale of any security
Securities and Exchange Commission seeks disgorgement of ill-gotten gains with prejudgment interest on a joint and several basis
Securities and Exchange Commission seeks civil penalties against Satish Appalakutty
Securities and Exchange Commission seeks an order that permanently enjoins Satish Appalakutty from acting as or being associated with any investment adviser

PDF

Securities and Exchange Commission v. Appalakutty Et Al. · Source

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Extracted body text (37,115c)

COMPLAINT
SEC v. APPALAKUTTY ET AL.

JASON H. LEE (Cal. Bar No. 253140)
DAVID ZHOU (NY Bar No. 4926523)
JASON M. BUSSEY (Cal. Bar No. 227185)
[email protected]
HANNAH CHO (Cal. Bar No. 342289)
[email protected]

Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
44 Montgomery Street, Suite 700
San Francisco, CA 94104
(415) 705-2500 (Telephone)
(415) 705-2501 (Facsimile)

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,

vs.

SATISH APPALAKUTTY, LORVEN FUNDS, and
LORVEN ADVISORS LLC,

Defendants,
and

VISTALYTICS INC.,

Relief Defendant.

Case No.

COMPLAINT

DEMAND FOR JURY TRIAL

Plaintiff Securities and Exchange Commission (the “Commission”) alleges:

SUMMARY OF THE ACTION

1. From at least the beginning of 2019 through March 2024, Defendants Satish

Appalakutty (“Appalakutty”), Lorven Funds, and Lorven Advisors LLC (“Lorven Advisors,” and

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

mailto:[email protected]
mailto:[email protected]

COMPLAINT
SEC v. APPALAKUTTY ET AL. -2-

together with Lorven Funds, the “Lorven Entities”) orchestrated a Ponzi-like scheme, fraudulently

raising at least $37 million from at least 100 investors.

2. Defendants made numerous material misrepresentations and omissions about three

different types of investment opportunities. Specifically, Defendants falsely told investors that

they would use investor funds to: (i) acquire stocks of prominent public companies at a discount in

what they referred to as Secondary Public Offering (“SPO”) transactions; (ii) acquire stocks of

private pre-Initial Public Offering (“IPO”) companies; or (iii) engage in some other investment

activity to generate promised returns. For each of these purported investment opportunities,

Defendants falsely promised exceedingly high and guaranteed rates of return and promised that

investors would not lose their money.

3. All of the investment opportunities were, however, a fiction. Defendants did not

purchase any stocks of public or pre-IPO companies or carry out any other income-generating

activities on behalf of investors.

4. Instead, in Ponzi-like fashion, Defendants used new investors’ money to pay

promised returns to prior investors. Appalakutty also misappropriated approximately $6.7 million

of investor money for his own personal benefit, including using approximately $4.4 million for his

software startup, Vistalytics Inc. (“Vistalytics” and “Relief Defendant”).

5. By early 2024, Defendants were unable to raise funds quickly enough to pay the

returns they had promised, and they therefore stopped repaying investors.

6. As a result of the conduct alleged in this Complaint, Defendants violated the

antifraud provisions of the Securities Act of 1933 (“Securities Act”) and the Securities Exchange

Act of 1934 (“Exchange Act”).

7. In this action, the Commission seeks against all three Defendants permanent

injunctions; conduct-based injunctions prohibiting Defendants from participating in the issuance,

purchase, offer, or sale of any security; and disgorgement of ill-gotten gains with prejudgment

interest on a joint and several basis. The Commission also seeks against Appalakutty civil

penalties and an order that permanently enjoins him from, directly or indirectly, acting as or being

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SEC v. APPALAKUTTY ET AL. -3-

associated with any investment adviser. Additionally, the Commission seeks disgorgement of ill-

gotten gains with prejudgment interest from Relief Defendant Vistalytics.

JURISDICTION AND VENUE

8. The Commission brings this action and this Court has jurisdiction over this action

pursuant to Sections 20(b), 20(d), 20(e), and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b),

77t(d), 77t(e), and 77v(a)] and Sections 21(d), 21(e), and 27(a) of the Exchange Act [15 U.S.C.

§§ 78u(d), 78u(e), and 78aa(a)].

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

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

of business alleged in this Complaint.

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

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

transactions, practices, and courses of business that form the basis for the violations alleged in this

Complaint occurred in this District. For example, Appalakutty regularly met with investors at his

office located in the City of Santa Clara, California. In addition, venue is proper in this district

because Appalakutty lived in the County of Santa Clara, California when the conduct alleged in

this Complaint occurred.

DIVISIONAL ASSIGNMENT

11. Under Civil Local Rules 3-2(c) and 3-5, this civil action should be assigned to the

San Jose Division because a substantial part of the events or omissions which give rise to the

claims alleged herein occurred in the County of Santa Clara, California.

DEFENDANTS

12. Satish Appalakutty, age 53, is a resident of Milpitas, California. He is the founder

and CEO of Lorven Funds, Lorven Advisors LLC, and Vistalytics Inc.

13. Lorven Funds is a California corporation with its principal place of business in the

City of Santa Clara, California. Appalakutty fully owned and controlled Lorven Funds at all

relevant times in this Complaint. According to Lorven Funds’ Statement of Information filed with

the California Secretary of State on June 12, 2020, its type of business is described as “financial

COMPLAINT
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software and services.” Appalakutty used Lorven Funds to carry out the scheme set forth in this

Complaint.

14. Lorven Advisors LLC is a California limited liability company with its principal

place of business in the City of Santa Clara, California. Appalakutty fully owned and controlled

Lorven Advisors at all relevant times in this Complaint. According to Lorven Advisors’ Statement

of Information filed with the California Secretary of State on December 6, 2022, its type of

business is described as “software services.” Appalakutty used Lorven Advisors to carry out the

scheme set forth in this Complaint.

RELIEF DEFENDANT

15. Relief Defendant Vistalytics Inc. is a California corporation with its principal place

of business in the City of Santa Clara, California. Appalakutty is the majority owner, founder, and

CEO of the company. Vistalytics is a technology software company that developed a subscription-

based platform that contained historical information about public company stock prices and

purportedly made predictions about the next-day opening prices of securities.

FACTUAL ALLEGATIONS

A. Background

16. From at least the beginning of 2019 through March 2024, Defendants fraudulently

raised at least $37 million from at least 100 investors.

17. Appalakutty met and solicited many of his potential investors through a Hindu

temple he attended in the San Francisco Bay Area. Some of the investors met him while

volunteering at the temple or through friends that knew him. Appalakutty represented himself as

an entrepreneur who could generate investor returns more favorable than the interest rates that a

bank would offer and represented that he would keep investor money safe from any losses.

Appalakutty also held himself out as being knowledgeable about the financial industry from his

purported background as a software engineer at financial technology companies in Silicon Valley.

Many investors trusted Defendants with their money because of Appalakutty’s connection to the

temple and his purported professional background.

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SEC v. APPALAKUTTY ET AL. -5-

18. Appalakutty held in-person, telephonic, and virtual meetings online with investors

to solicit investments.

B. Defendants Defrauded Investors by Selling Fake Investment Opportunities

19. Appalakutty, through the Lorven Entities, offered potential investors three types of

purported investment opportunities: (1) to purchase shares in public companies at a discount; (2) to

purchase shares of pre-IPO companies; and (3) to invest in promissory notes with a guaranteed

high rate of interest from other unspecified investment opportunities Appalakutty could

purportedly access. All of these investment opportunities were fictional. Appalakutty knew or

was reckless in not knowing that these opportunities were not supported by actual investments.

20. To add to these purported investment opportunities’ appeal, Defendants promised

minimum rates of return, usually on an annualized basis, that were exceptionally high—ranging

from 8% to 62.5%. Defendants also misleadingly represented to investors that their investments

would be “protected,” and that they would not lose their principal. It was important to investors

that they would earn high returns on their investments with Defendants and that their capital would

be kept safe by Defendants.

1. Secondary Public Offerings

21. Appalakutty told certain investors that he would acquire shares of publicly traded

companies—including high-profile technology and biopharmaceutical companies—at a discount

and then sell them later at higher market prices. Appalakutty referred to this type of transaction as

an “SPO.” Appalakutty falsely explained to at least one investor that he was able to offer SPOs

because he had connections with company executives who were looking to sell their restricted

stock units at below-market prices. Appalakutty also falsely represented to at least one investor

that major financial firms gave him access to these discounted-share opportunities because he

managed tens of millions of dollars in assets.

22. Defendants memorialized these SPO investments in agreements stylized as a

“promissory note.” Those documents, which bear the names and logos of Lorven Funds or Lorven

Advisors and were signed by Appalakutty on behalf of those entities, specified the amount of the

victim’s investment, the public company whose shares would be acquired, and the guaranteed rate

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SEC v. APPALAKUTTY ET AL. -6-

of return. Defendants notarized many of the promissory notes they entered into with investors. At

least one investor felt that Appalakutty’s willingness to notarize the promissory notes legitimized

the transactions, which provided the investor with an additional layer of comfort regarding

investing with Appalakutty.

23. Appalakutty claimed he could generate the high rates of return in the promissory

notes by telling certain investors that they would receive a share of the profits that Defendants

would make from buying the stocks at a discount and selling them at a higher price. Appalakutty

also misrepresented to at least one investor that, if a certain stock performed especially well, that

investor could potentially share in the larger profit beyond the promised rates of return.

24. In one instance, for example, Defendants entered into an SPO “promissory note”

that reflected a payment of $425,000 from an investor to acquire the stock of a prominent Silicon

Valley media company. The document, which bore the name and logo of Lorven Advisors—and

Appalakutty’s signature on its behalf—guaranteed the investor a minimum 12% annualized

interest rate in exchange for a 15% commission from the interest earned. It also specified the price

at which the stock would be acquired.

25. In another instance, Defendants entered into a “promissory note” that reflected a

payment of $120,000 from an investor to acquire the stock of a prominent technology product

company. The document, which bore the logo of Lorven Advisors but specified the “borrower” as

Lorven Funds and was signed by Appalakutty on behalf of Lorven Funds, guaranteed a minimum

of 8% interest rate, specified the price at which the stock would be acquired, and represented that

the capital of $120,000 would be “protected” from being “devalued.”

26. Appalakutty knew or was reckless in not knowing that his representations

concerning “SPOs” were false and misleading. Defendants did not acquire any public company

shares with investors’ money, at discounted rates or otherwise. Thus, Defendants would not have

been able to pay investors their guaranteed interest payments based on the difference between

those discounted rates and market prices. These representations were material to investors who

expected Defendants to be generating regular returns based on their SPO investments.

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27. Appalakutty also knew or was reckless in not knowing that the Lorven Entities

could not buy or sell shares of publicly-traded companies because the Lorven Entities had no

brokerage accounts.

28. Furthermore, Appalakutty knew or were reckless in not knowing that he did not

have access to discounted shares at public companies.

29. Investors in SPOs wired or otherwise transferred money to bank accounts

maintained by either Lorven Funds or Lorven Advisors. Instead of using the money to make the

promised investments in public company stocks, Appalakutty commingled the funds transferred by

multiple investors, then used those commingled funds to pay his personal expenses, fund his other

company Vistalytics, and pay returns to prior investors.

2. Pre-IPO Investment Offerings

30. Defendants also offered and sold investment opportunities to acquire shares in

certain well-known private technology companies. Appalakutty explained that investors would be

entitled to guaranteed minimum interest rate payments over a period of time. At the end of that

period, if the company went public, Appalakutty promised to sell the shares in the market and split

the profits with the investors. If a company did not go public by the specified date, Appalakutty

assured investors they would nevertheless be entitled to the minimum interest rate payments.

31. Appalakutty’s explanation as to how he was able to offer investors pre-IPO

opportunities mirrored the misrepresentations he made about SPO offers. In particular,

Appalakutty falsely told at least one investor that he was part of a syndicate that knew of people

trying to sell their shares in pre-IPO companies.

32. Defendants also signed promissory notes—which bore the logo of Lorven Funds or

Lorven Advisors and were signed by Appalakutty on their behalf—with investors that falsely

promised, among other things, to purchase certain pre-IPO companies’ shares, a guaranteed high

rate of return, and to repay the principal together with the purported returns within several months.

33. In one example, Defendants entered into a pre-IPO “promissory note” that reflected

a payment of $400,000 by an investor to purchase shares of an aerospace manufacturer at “10%

discount on the opening IPO price.” The document bore the name and logo of Lorven Advisors

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and was signed on that entity’s behalf by Appalakutty. It promised a minimum of 37% interest per

year and charged a 15% commission from interest earned.

34. In another instance, Defendants entered into a “promissory note” that reflected a

payment of $175,000 by an investor to purchase shares of an artificial intelligence company at a

14% discount with a minimum interest rate of 41%. The document bore the logo of Lorven

Advisors but listed Lorven Funds as the “borrower” and was signed by Appalakutty on behalf of

Lorven Funds. The document also specified that the invested capital of $175,000 would be

“protected” from being “devalued” and that Defendants would charge a commission of 10% from

interest earned.

35. These representations regarding pre-IPO offerings were false and misleading

because Defendants did not purchase any shares of private companies as promised. These

representations were material to investors who expected Defendants to be generating regular

returns based on their pre-IPO investments.

36. Appalakutty knew or was reckless in not knowing that his representations

concerning pre-IPO offerings were false and misleading because he did not in fact purchase any

shares of private companies. Further, Appalakutty knew or was reckless in not knowing that he

would not be able to pay investors their guaranteed minimum rate of interest payments because he

did not purchase any private company shares. Appalakutty also knew or was reckless in not

knowing that he did not have the ability to purchase those private company shares.

37. Once the investors wired or otherwise transferred their investment money to

Lorven Funds’ or Lorven Advisors’ bank accounts for investment in pre-IPO shares, Appalakutty

commingled the funds transferred by multiple investors, then used those commingled investor

funds to pay his personal expenses, fund his other company Vistalytics, or pay returns to prior

investors.

3. “Debt” or Note Offerings

38. Defendants also fraudulently offered and sold to investors high interest rate

promissory notes that were not tied to any specific security. Appalakutty sometimes referred to

these offers at “debt” deals.

COMPLAINT
SEC v. APPALAKUTTY ET AL. -9-

39. Defendants often did not specify the purported security they would invest in or

explain how they would turn a profit. Defendants falsely represented to at least one investor,

however, that the investor’s money would be pooled and invested so as to generate specified

returns. Defendants assured investors in these “debt” deals that they would not lose their money.

40. As with the SPO and pre-IPO offers, Defendants signed promissory notes with

investors that detailed the investment amount, the repayment date, and the high guaranteed interest

rate. In one example, Defendants entered into a “promissory note” that reflected a payment of

$150,000 by an investor for a minimum interest rate of 38% a year with a 20% commission for

Defendants. The promissory note identified Lorven Advisors as the “borrower” in one part of the

document but then later listed Lorven Funds as the “borrower,” and Appalakutty signed on behalf

of Lorven Funds. The promissory note Appalakutty drafted and provided to the investor specified

that “[t]he Capital is secured and will not reduce in value.”

41. In another example, Appalakutty and Lorven Advisors entered into a “promissory

note” that reflected a payment of $200,000 to Lorven Advisors as the “borrower” and promised

13.25% annualized interest to the investor. Appalakutty signed the document on behalf of Lorven

Advisors, and it stated that the invested capital and proceeds would be “protected from being

devalued.”

42. Defendants’ representations regarding the “debt” or promissory note offerings were

false and misleading because Defendants did not actually invest investors’ money in return-

generating opportunities as promised. These representations were material to investors who

expected Defendants to be generating regular returns based on their investments.

43. Appalakutty knew or was reckless in not knowing that his representations

regarding the purported “debt” offers were false and misleading because he did not invest the

money provided by investors in any return-generating enterprise. He also knew or was reckless in

not knowing that he would not be able to pay investors their guaranteed minimum rate of interest

payments because he had no ability to generate those returns.

44. Investors in Defendants’ “debt” offerings wired or otherwise transferred money to

either Lorven Funds’ bank accounts or Lorven Advisors’ bank accounts. Instead of using the

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money to make investments or generate profit, Appalakutty used investor funds to pay his personal

expenses, fund his other company Vistalytics, or pay returns to prior investors.

C. Appalakutty’s Deceptive Acts to Trick Investors

45. Appalakutty used new investor money to make payments to existing investors in

order to deceive them into believing that their investments were legitimate and were successfully

generating returns.

46. For example, at the end of May 2023, a Lorven Advisors account had been drawn

down to approximately $5,000. In early June 2023, an investor wired that account $700,000. The

next day, Appalakutty transferred $50,000 from the Lorven Advisors account to his personal bank

account and used nearly all of that money to pay off personal credit card expenses. Appalakutty

contemporaneously transferred another $50,000 from the Lorven Advisors account to a Vistalytics

account to pay employee payroll and travel expenses. Appalakutty then used $415,000 of the

investor’s $700,000 wire to Lorven Advisors to pay returns previously promised to eight other

existing investors. A few days later, Appalakutty used approximately $64,000 of the investor’s

funds from the Lorven Advisors account to purchase himself an electric car. That same day,

Appalakutty used the remaining amount from the initial $700,000 investment to repay other

existing investors.

47. In addition, when the repayment dates set forth in promissory notes neared,

Appalakutty sometimes asked investors to “roll-over” their principal and supposed returns into

new investments rather than receive pay-outs, allowing Appalakutty to conserve his cash and keep

his Ponzi-like scheme going.

48. Furthermore, Appalakutty provided falsified account statements when investors

asked about the status of their investments. These account statements, which were often sent as

tables in an email, purportedly showed the amount of capital invested for each investment in SPO,

pre-IPO, and “debt” deals; price at which the shares were acquired; number of shares purchased;

sale price; total proceeds; deductions for taxes; and net proceeds. In some versions, the tables also

included references to the purported maturity date of each of the investments. However, these

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account statements were completely fabricated since Defendants did not purchase any stocks or

make the promised investments.

D. Appalakutty Misused and Misappropriated Investor Funds

49. During his years-long scheme, Appalakutty misappropriated more than $6.7

million of investor money for his own personal benefit. Appalakutty misappropriated

approximately $2.3 million of investor money for personal expenditures such as the down payment

for a personal residence, a new car, and personal travel. He also misappropriated around $4.4

million to pay expenses for his software startup, Vistalytics.

50. Appalakutty commingled new investments from investors in the bank accounts he

held in the names of the Lorven Entities and his own personal accounts. For example, in

December 2022, an investor wired $300,000 to a Lorven Advisors bank account. Appalakutty

transferred $240,000 of that investment to a personal account and used $230,000 towards the

purchase of his personal residence. Appalakutty was the sole signer on each of the Lorven

Entities’ bank accounts and had sole control over transactions involving those accounts.

51. Appalakutty also paid for personal expenses directly from the Lorven Entities’

bank accounts. For example, Appalakutty spent $88,000 on personal travel and purchased the

$64,000 car as alleged above.

52. With regard to his misappropriation, Appalakutty knew or was reckless in not

knowing that these payments to himself or for his benefit were improper and that he was engaged

in a Ponzi-like scheme where he pooled new investor funds in order to pay prior investors their

promised returns, while also misappropriating funds for his own personal use.

53. Appalakutty did not disclose these personal expenditures to investors, who believed

that they were investing in specific investment opportunities such as the purchasing of SPO or pre-

IPO shares or some other income-generating investment opportunity. Appalakutty’s failure to

disclose his intention to misappropriate, and practice of misappropriating, investment funds was

material to a reasonable investor, as well as the actual defrauded investors who transferred money

for SPO, pre-IPO shares, and “debt” deals. It would have been important for a reasonable investor

to know that the money they were sending Appalakutty would not in fact be used for the stated

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purposes, but would instead be used to pay existing investors, pay expenses for Appalakutty’s

startup Vistalytics, or pay for certain of Appalakutty’s other personal expenses.

E. Relief Defendant Vistalytics Received Ill-Gotten Proceeds from Defendants

54. Appalakutty transferred more than $4.1 million from the Lorven Entities’ accounts

to fund his own startup, Vistalytics, including for payroll and other business expenses.

Appalakutty also paid approximately $300,000 in Vistalytics expenses directly from the Lorven

Entities’ accounts. In total, Vistalytics improperly benefited from approximately $4.4 million in

proceeds from Defendants’ scheme.

55. Appalakutty founded Vistalytics to develop a subscription-based software platform

that contained historical information about public company stock prices and purportedly made

predictions about the next-day opening prices of securities. Throughout Appalakutty’s scheme,

Vistalytics barely generated $3,000 in revenue, causing Appalakutty to transfer investor funds

from the Lorven Entities to pay the salaries of Vistalytics employees as well as other business

expenses to keep Vistalytics afloat. Vistalytics had no legitimate claim to the funds of the

defrauded investors, and there is no documented business relationship between Vistalytics and the

Lorven Entities.

56. Appalakutty did not disclose his Vistalytics expenditures to the defrauded

investors, who did not know that their money was being used for Vistalytics. Investors believed,

based on Appalakutty’s material misrepresentations, that they were investing in specific

investment opportunities such as the purchasing of SPO or pre-IPO shares or some other income-

generating investment opportunity. These facts were material to investors.

57. Appalakutty knew or was reckless in not knowing that Vistalytics did not have any

legitimate claims to investors’ money that was meant to be invested and generate returns as

promised.

F. Appalakutty’s Scheme Collapses

58. By early 2024, Appalakutty began having difficulty making the promised payments

to investors. To explain the lack of payments, Appalakutty falsely told certain investors that his

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bank accounts were temporarily frozen by the Federal Bureau of Investigation as part of an

investigation.

59. By May 2024, Appalakutty, the Lorven Entities, and Vistalytics had virtually no

cash in their bank accounts.

G. Tolling Agreements

60. Appalakutty, Lorven Funds, and Lorven Advisors each, through counsel, signed

tolling agreements with the Commission that suspended the running of the applicable statute of

limitations from May 1, 2024 to November 1, 2024. Defendants each subsequently signed four

additional tolling extension agreements collectively extending the statute of limitations to January

31, 2026. Each of the five tolling agreements specified a period of time in which “the running of

any statute of limitations applicable to any action or proceeding against [Defendants] authorized,

instituted, or brought by or on behalf of the Commission or to which the Commission is a party

arising out of the investigation (‘any proceeding’), including any sanctions or relief that may be

imposed therein, is tolled and suspended.” The tolling agreements further provided that

Defendants and any of their agents or attorneys “shall not include the tolling period in the

calculation of the running of any statute of limitations or for any other time-related defense

applicable to any proceeding, including any sanctions or relief that may be imposed therein, in

asserting or relying upon any such time-related defense.”

61. Vistalytics also signed a tolling agreement with the Commission that suspended the

running of the applicable statute of limitations from May 6, 2024 to November 6, 2024.

Vistalytics subsequently executed three additional tolling extension agreements that collectively

extended the statute of limitations to February 1, 2026. Each of the four tolling agreements

specified a period of time in which “the running of any statute of limitations applicable to any

action or proceeding against [Vistalytics] authorized, instituted, or brought by or on behalf of the

Commission or to which the Commission is a party arising out of the investigation (‘any

proceeding’), including any sanctions or relief that may be imposed therein, is tolled and

suspended.” The tolling agreements further provided that Vistalytics and any of its agents or

attorneys “shall not include the tolling period in the calculation of the running of any statute of

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limitations or for any other time-related defense applicable to any proceeding, including any

sanctions or relief that may be imposed therein, in asserting or relying upon any such time-related

defense.”

FIRST CLAIM FOR RELIEF

(Appalakutty, Lorven Funds, and Lorven Advisors)

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

62. The Commission re-alleges and incorporates by reference Paragraph Nos. 1

through 61.

63. Defendants, by engaging in the conduct described above, directly or indirectly, in

connection with the purchase or sale of securities, by use of the means or instruments of

transportation or communication in interstate commerce or by use of the mails, or of the facilities

of a national securities exchange, with scienter:

a. Employed devices, schemes, or artifices to defraud;

b. Made untrue statements of material facts or omitted to state material facts necessary

in order to make the statements made, in the light of the circumstances under which they were

made, not misleading; and

c. Engaged in acts, practices, or courses of business which operated or would operate

as a fraud or deceit upon other persons, including purchasers of securities.

64. By reason of the foregoing, Defendants violated, and unless restrained and 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

(Appalakutty, Lorven Funds, and Lorven Advisors)

Violations of Section 17(a) of the Securities Act

65. The Commission re-alleges and incorporates by reference Paragraph Nos. 1

through 61.

COMPLAINT
SEC v. APPALAKUTTY ET AL. -15-

66. Defendants, by engaging in the conduct described above, directly or indirectly, in

the offer or sale of securities, by use of the means or instruments of transportation or

communication in interstate commerce or by use of the mails:

a. with scienter, employed devices, schemes, or artifices to defraud;

b. obtained money or property by means of untrue statements of material fact or by

omitting 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

c. engaged in transactions, practices, or courses of business which operated or would

operate as a fraud or deceit upon purchasers.

67. By reason of the foregoing, Defendants violated, and unless restrained and enjoined

will continue to violate, Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].

THIRD CLAIM FOR RELIEF

(Vistalytics)

Relief Defendant – Unjust Enrichment

68. The Commission re-alleges and incorporates by reference Paragraph Nos. 1

through 61.

69. As described above, Defendants engaged in a scheme to defraud investors in

connection with the offer, purchase, or sale of securities and to use the money raised to unjustly

enrich themselves and Relief Defendant Vistalytics.

70. Vistalytics has no legitimate claim to the funds, property, and benefits described

above, and has thus been unjustly enriched under circumstances in which it is not just, equitable, or

conscionable for it to retain such profits.

71. By reason of the foregoing, it would be inequitable for Vistalytics to retain the

proceeds resulting from Defendants’ violations of the federal securities laws and such proceeds

should be disgorged.

PRAYER FOR RELIEF

WHEREFORE, the Commission respectfully requests that the Court:

COMPLAINT
SEC v. APPALAKUTTY ET AL. -16-

Enter an order permanently enjoining Defendants from directly or indirectly violating

Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 [17 C.F.R. § 240.10b-5]

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

II.

Enter an order permanently enjoining Defendants from directly or indirectly, including, but

not limited to, through any entity owned or controlled by them, participating in the issuance,

purchase, offer, or sale of any security, provided, however, that such an injunction shall not prevent

Appalakutty from purchasing or selling securities for his own personal accounts, pursuant to

Section 20(b) of the Securities Act [15 U.S.C. § 77t(b)] and Sections 21(d)(1) and 21(d)(5) of the

Exchange Act [15 U.S.C. §§ 78u(d)(1) and 78u(d)(5)].

III.

Enter an order requiring Defendants to disgorge on a joint and several basis all ill-gotten

gains received as a result of their unlawful conduct plus prejudgment interest thereon pursuant to

Sections 21(d)(3), 21(d)(5), and 21(d)(7) of the Exchange Act [15 U.S.C. §§ 78u(d)(3), 78u(d)(5),

and 78u(d)(7)].

IV.

Enter an injunction, in a form consistent with Rule 65(d) of the Federal Rules of Civil

Procedure and pursuant to Sections 21(d)(1) and 21(d)(5) of the Exchange Act [15 U.S.C. §§

78u(d)(1), 78u(d)(5)], permanently restraining and enjoining Appalakutty from, directly or

indirectly, acting as or being associated with any investment adviser.

Enter an order requiring Appalakutty to pay civil monetary penalties pursuant to Section

20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d) of the Exchange Act [15 U.S.C.

§ 78u(d)].

COMPLAINT
SEC v. APPALAKUTTY ET AL. -17-

VI.

Enter an order requiring Vistalytics to disgorge the ill-gotten gains or unjust enrichment it

obtained or derived from Defendants’ unlawful conduct, together with prejudgment interest on all

such amounts.

VII.

Retain jurisdiction of this action in accordance with the principles of equity and the Federal

Rules of Civil Procedure in order to implement and carry out the terms of all orders and decrees

that may be entered, or to entertain any suitable application or motion for additional relief within

the jurisdiction of this Court.

VIII.

Grant such other and further relief as this Court may determine to be just and necessary.

JURY DEMAND

Pursuant to Federal Rule of Civil Procedure 38 and Civil Local Rule 3-6, the Commission

demands a trial by jury on all issues so triable.

Dated: January 29, 2026 Respectfully submitted,

/s/ Hannah Cho
Hannah Cho
Attorney for Plaintiff
SECURITIES AND EXCHANGE COMMISSION

1. Secondary Public Offerings
2. Pre-IPO Investment Offerings
3. “Debt” or Note Offerings

OCR text (39,664c · textlayer · 95% conf)

COMPLAINT
SEC v. APPALAKUTTY ET AL.

JASON H. LEE (Cal. Bar No. 253140)
DAVID ZHOU (NY Bar No. 4926523)
JASON M. BUSSEY (Cal. Bar No. 227185)
[email protected]
HANNAH CHO (Cal. Bar No. 342289)
[email protected]

Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
44 Montgomery Street, Suite 700
San Francisco, CA 94104
(415) 705-2500 (Telephone)
(415) 705-2501 (Facsimile)

SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,

vs.

SATISH APPALAKUTTY, LORVEN FUNDS, and
LORVEN ADVISORS LLC,

Defendants,
and

VISTALYTICS INC.,

Relief Defendant.

Case No.

COMPLAINT

DEMAND FOR JURY TRIAL

Plaintiff Securities and Exchange Commission (the “Commission”) alleges:

SUMMARY OF THE ACTION

1. From at least the beginning of 2019 through March 2024, Defendants Satish

Appalakutty (“Appalakutty”), Lorven Funds, and Lorven Advisors LLC (“Lorven Advisors,” and

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

Case 3:26-cv-00917 Document 1 Filed 01/29/26 Page 1 of 17