MEMPHIS, Tenn. — An injunction was approved after the Tennessee Department of Commerce & Insurance’s (TDCI) Securities Division and the Tennessee Attorney General’s Office asked to freeze bank accounts and financial assets of Memphis-based individuals, asking for those impacted to come forward.
The group allegedly engaged in fraudulent activity and acted as unregistered broker-dealers and investment advisers, in addition to the unregistered activity, a release by TDCI said the group allegedly committed other violations of state securities law and other Tennessee laws protecting consumers.
Investor complaints led to the investigation into three individual defendants, Ali Raza Galani, Misam Abidi, and Anisha Abidi as well as their various corporate entities, Star Credit Holdings, LLC, Satori Credit Solutions, LLC, NumisMe, LLC.
Complaints said investors lost the majority of their investments through the STAR Investment Club and purchase of the NUME cryptocurrency token, which Galani and the Abidis fully owned and controlled.
The complaint alleges Galani, the Abidis, and their companies violated state securities law by engaging in fraudulent activity, misleading investors, comingling and misusing investor funds, by not registering their securities offerings with TDCI’s Securities Division, and also by not registering as broker-dealers, broker-dealer agents, investment advisers, or investment adviser representatives, according to a release from TDCI.
"Defendants made representations to investors that the NUME Token and its derivative products and services would produce for them returns or other benefits upon purchase of the tokens or use of the derivative products or services," the injunction reads.
"Investors in the NUME Token and its derivative products and services did not receive any return by virtue of owning, holding or staking the NUME Token. Defendants comingled and transferred investor funds from business bank accounts of Defendents NumisMe and STAR, comingling them through the bank accounts of Defendent SATORI, then transferring them to the personal bank account of Defendants Misam Abidi and Anisha Abidi, and to the personal Coinbase account of Defendant Misam Abidi."
Investors in 17 states, including Tennessee, invested over $6.3 million in fraudulent investments, according to the complaint. Wyoming investors lost the most with over $2.4 million followed by California investors who lost $1.14 million. Tennessee investors are believed to have lost over $250,000, according to TDCI.
The injunction said those who purchased NUME Tokens or participated in the Star Investment Club lost a majority of their investments, and that defendants used investor funds for personal expenses.
After a recent hearing, Galani, the Abidis, and the corporate entities agreed to the entry of a Temporary Injunction order. The injunction freezes many of the Defendants’ assets and prevents any of the Defendants from conducting any further business in Tennessee. A copy of the injunction can be found here.
The case is being litigated by the Tennessee Attorney General’s Office.
“When companies violate Tennessee securities law, we will not hesitate to protect Tennesseans and preserve the integrity of our economy,” Tennessee Attorney General Jonathan Skrmetti said. “My office is proud to partner with the Tennessee Department of Commerce & Insurance to enforce our laws, whether we’re dealing with traditional assets or digital assets.”
As part of the ongoing court proceedings, TDCI’s Securities Division investigators are asking those who have invested with Galani, the Abidis, or their corporate entities to come forward and share information as it relates to their dealings with these individuals and corporations.
“Investors who might have lost money or otherwise been involved in these investments may be hesitant to come forward or may even be embarrassed by what happened,” said TDCI Securities Division Assistant Commissioner Elizabeth Bowling. “If you were an investor impacted by any of these named defendants, I ask that you contact our team today and share your experience so that the individuals causing financial losses to not only Tennessee investors, but investors across the country, might face the consequences for their actions.”
Affected investors are urged to submit a complaint related specifically to this investigation via TDCI’s Securities Division’s website.
“This is a prime example of how good cooperation between investigators at TDCI and our colleagues at the Tennessee Attorney General’s Office can help protect Tennessee consumers from investing their hard-earned money in unregistered investment funds or through unregistered digital investments being offered as a security,” TDCI Commissioner Carter Lawrence said. “I applaud the court’s decision to grant this temporary injunction so that more affected investors can be located and interviewed.”
