SEC v. Pannon Investment Advisors LLC; and Dusan Varga, No. LR-26167, Southern District of Florida (Oct. 31, 2024) — Press Release

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26167 / October 31, 2024 Securities and Exchange Commission v. Pannon Investment Advisors LLC and Dusan Varga, No. 1:24-cv-24241 (S.D. Fla. filed Oct. 30, 2024) SEC Charges Florida Resident with Operating a $1.6 Million Ponzi Scheme Targeting the Serbian-American Community Yesterday, the Securities and Exchange Commission (“SEC”) charged Pannon Investment Advisors LLC and its Chief Executive Officer, Dusan Varga, alleging they fraudulently raised approximately $1.6 million from at least 20 investors through an unregistered securities offering. Most of the investors are members of the Serbian-American community, and this case is part of the Miami Regional Office’s Fraud Against Minority Groups Initiative. The SEC’s complaint alleges that from May 2020 through approximately January 2024, Varga and Pannon raised at least $1.6 million from at least 20 investors to invest in the Pannon Risk-Managed Income Fund (“Pannon Fund”), by making repeated material misrepresentations and selling unregistered securities. As alleged, the misrepresentations concerned, among other things, Varga’s and Pannon’s use of investor funds, the profitability of the Pannon Fund’s trading activities, Varga’s background as a purported registered representative of a broker-dealer, and the risks of investing in the Pannon Fund. The complaint further alleges Varga and Pannon made Ponzi-like payments to investors, misused and misappropriated investor funds, and otherwise engaged in a variety of conduct which operated as a fraud and deceit on investors. The SEC’s complaint, filed in the United States District Court for the Southern District of Florida, charges Varga and Pannon with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (“Securities Act”), Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder, and Sections 206(1), 206(2), and 206(4) and Rule 206(4)-8 thereunder of the Investment Advisers Act of 1940 (“Advisers Act”). Without admitting or denying the allegations in the SEC’s complaint, Varga and Pannon consented to the entry of a final judgment, subject to court approval, which would permanently enjoin each of them from violating Sections 5(a), 5(c), and 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Sections 206(1), 206(2), and 206(4) and Rule 206(4)-8 thereunder of the Advisers Act. The final judgment, if approved by the court, also would impose an officer and director bar against Varga, and order Varga and Pannon to pay disgorgement plus prejudgment interest and civil penalties in amounts to be determined by the court at a later date upon motion of the SEC. Melika Hadziomerovic and Lina M. Fernandez in the Miami Regional Office conducted the SEC’s investigation under the supervision of Eric R. Busto and Glenn S. Gordon. The SEC’s litigation will be led by Christine Nestor. The SEC thanks the Florida Office of Financial Regulation for its assistance in this matter.

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26167 / October 31, 2024 Securities and Exchange Commission v. Pannon Investment Advisors LLC and Dusan Varga, No. 1:24-cv-24241 (S.D. Fla. filed Oct. 30, 2024) SEC Charges Florida Resident with Operating a $1.6 Million Ponzi Scheme Targeting the Serbian-American Community Yesterday, the Securities and Exchange Commission (“SEC”) charged Pannon Investment Advisors LLC and its Chief Executive Officer, Dusan Varga, alleging they fraudulently raised approximately $1.6 million from at least 20 investors through an unregistered securities offering. Most of the investors are members of the Serbian-American community, and this case is part of the Miami Regional Office’s Fraud Against Minority Groups Initiative. The SEC’s complaint alleges that from May 2020 through approximately January 2024, Varga and Pannon raised at least $1.6 million from at least 20 investors to invest in the Pannon Risk-Managed Income Fund (“Pannon Fund”), by making repeated material misrepresentations and selling unregistered securities. As alleged, the misrepresentations concerned, among other things, Varga’s and Pannon’s use of investor funds, the profitability of the Pannon Fund’s trading activities, Varga’s background as a purported registered representative of a broker-dealer, and the risks of investing in the Pannon Fund. The complaint further alleges Varga and Pannon made Ponzi-like payments to investors, misused and misappropriated investor funds, and otherwise engaged in a variety of conduct which operated as a fraud and deceit on investors. The SEC’s complaint, filed in the United States District Court for the Southern District of Florida, charges Varga and Pannon with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (“Securities Act”), Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder, and Sections 206(1), 206(2), and 206(4) and Rule 206(4)-8 thereunder of the Investment Advisers Act of 1940 (“Advisers Act”). Without admitting or denying the allegations in the SEC’s complaint, Varga and Pannon consented to the entry of a final judgment, subject to court approval, which would permanently enjoin each of them from violating Sections 5(a), 5(c), and 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Sections 206(1), 206(2), and 206(4) and Rule 206(4)-8 thereunder of the Advisers Act. The final judgment, if approved by the court, also would impose an officer and director bar against Varga, and order Varga and Pannon to pay disgorgement plus prejudgment interest and civil penalties in amounts to be determined by the court at a later date upon motion of the SEC. Melika Hadziomerovic and Lina M. Fernandez in the Miami Regional Office conducted the SEC’s investigation under the supervision of Eric R. Busto and Glenn S. Gordon. The SEC’s litigation will be led by Christine Nestor. The SEC thanks the Florida Office of Financial Regulation for its assistance in this matter.