SEC v. MARK ALAN LISSER a/k/a MARK ALAN a/k/a MARK ALLEN, No. 2:20-cv-05798, Eastern District of New York (Dec. 1, 2020) — Complaint

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RICHARD R. BEST
REGIONAL DIRECTOR
Sanjay Wadhwa
Michael Paley
Todd Brody
Tejal D. Shah
Hane L. Kim
Attorneys for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
200 Vesey Street, Suite 400
New York, New York 10281-1022
(212) 336-0080 (Brody)
[email protected]

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

SECURITIES AND EXCHANGE COMMISSION,

     Plaintiff,

-against-

MARK ALAN LISSER a/k/a MARK ALAN a/k/a
MARK ALLEN

                                                            Defendant.

            COMPLAINT

            20 Civ. 5798 (    )

            JURY TRIAL
            DEMANDED

 Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against
Defendant Mark Alan Lisser a/k/a Mark Alan a/k/a Mark Allen (“Defendant” or “Lisser”), alleges
as follows:
SUMMARY
1. The Commission brings this civil enforcement action against Lisser for orchestrating
a fraudulent scheme in which he operated at least two “boiler rooms”
1
 through which he raised

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 “‘Boiler room’ activity consists essentially of offering to customers securities of certain issuers in
large volume by means of an intensive selling campaign through numerous salesmen by telephone or

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approximately $2.1 million by selling interests in purported investment funds to approximately 71
investors and then misappropriated approximately $900,000 of the investors’ funds.
2. From approximately October 2018 to March 2019, Lisser operated Knightsbridge
Capital Partners (“Knightsbridge”), an unregistered fund manager that managed KPP Late Stage
LLC and KPP Late Stage Investment Fund I LLC (collectively, the “KPP Funds”). The KPP Funds
purported to own stock in at least three “pre-IPO” companies (that is, private companies that were
likely to become public companies in the near term through an initial public offering (“IPO”)).
3. Lisser secured investors for the KPP Funds through at least two boiler rooms, in
which he directed over 20 salespeople (the “Knightsbridge Salespeople”) to cold-call potential
investors and to use high-pressure sales tactics to solicit investments. Lisser and the Knightsbridge
Salespeople told most investors that if they purchased an interest in one of the KPP Funds, they
would hold a pro rata share of the pre-IPO stock held by that fund.
4. Lisser falsely told potential investors (and instructed the Knightsbridge Salespeople
to do the same) that Knightsbridge was not charging any mark-ups or commissions on its sales of
interests in pre-IPO securities through the KPP Funds. Instead, Lisser assured investors that
Knightsbridge only profited by charging investors a fee based on the profits after the pre-IPO
companies went public, such that Knightsbridge and the investors were on the “same side of the
trade.” In truth, Knightsbridge both marked up the price of the shares of the pre-IPO companies by
14% to 62% and also paid the Knightsbridge Salespeople upfront commissions on all of their sales.
5. Lisser also falsely told investors that Knightsbridge had already purchased directly
from the employees of the respective companies the pre-IPO securities that Knightsbridge was

direct mail, without regard to the suitability to the needs of the customer, in such a manner as to
induce a hasty decision to buy the security being offered without disclosure of the material facts
about the issuer.” SEC v. R.J. Allen & Assocs., Inc., 286 F. Supp. 866, 874 (S.D. Fla. 1974).

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offering to sell through the KPP Funds, and instructed the Knightsbridge Salespeople to do the
same. Instead, Knightsbridge did not purchase any pre-IPO shares until it began raising money from
investors. Moreover, it did not purchase the shares from the employees or from the pre-IPO
companies themselves but, instead, bought interests in such shares from third-parties. As such,
Lisser misrepresented the risk of the investment in the KPP Funds.
6. Of the approximately $2.1 million raised from investors, Lisser only used about $1.2
million for investments. As of March 8, 2019, when it stopped operating, Knightsbridge had used
investor funds to acquire enough interests in shares of two pre-IPO companies to cover its sales of
shares of those companies to its customers, but it was short over 65,000 shares of a third pre-IPO
company, and did not have the funds necessary to purchase those shares.
7. Lisser misappropriated approximately $900,000 of the investor funds, including by
sending about $103,000 to his personal and business bank accounts and using about $47,000 to pay
credit card bills.
VIOLATIONS
8. By virtue of the foregoing conduct and as alleged further herein, Lisser has violated
Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)], and Section 10(b)
of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5
thereunder [17 C.F.R. § 240.10b-5].
9. Unless Lisser is restrained and enjoined, he will again engage in the acts, practices,
transactions and courses of business set forth in this Complaint or in acts, practices, transactions and
courses of business of similar type and object.
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
10. The Commission brings this action pursuant to authority conferred by Section 20(b)
of the Securities Act [15 U.S.C. § 77t(b)] and Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)].

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11. The Commission seeks a final judgment: (a) permanently enjoining Lisser from
violating the federal securities laws and rules this Complaint alleges he has violated; (b) ordering
Lisser to disgorge ill-gotten gains he received as a result of the violations alleged here and to pay
prejudgment interest thereon; (c) ordering Lisser to pay civil money penalties pursuant to Section
20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C.
§ 78u(d)(3)]; and (d) ordering any other and further relief the Court may deem just and proper.
JURISDICTION AND VENUE
12. This Court has jurisdiction over this action pursuant to Securities Act Section 22(a)
[15 U.S.C. § 77v(a)] and Exchange Act Section 27 [15 U.S.C. § 78aa].
13. Lisser, directly and indirectly, has made use of the means or instrumentalities of
interstate commerce or of the mails in connection with the transactions, acts, practices, and courses
of business alleged herein.
14. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)] and
Exchange Act Section 27 [15 U.S.C. § 78aa]. Lisser is an inhabitant of the Eastern District of New
York, and certain of the acts, practices, transactions, and courses of business alleged in this
Complaint occurred within this District, including that Knightsbridge was located in North
Bellmore, New York, and one of the boiler rooms that Lisser operated was located in Melville, New
York.
DEFENDANT
15. Lisser, age 40, resides in Massapequa, New York. During the relevant period, Lisser
was a principal and manager of Knightsbridge. Lisser was registered with the Financial Industry
Regulatory Authority (“FINRA”) as a registered representative from 2001 to 2016 and held the
Series 7 and 63 licenses.

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OTHER RELEVANT ENTITIES
16. Knightsbridge is a Delaware limited liability company incorporated on October 1,
2018, with its principal place of business in North Bellmore, New York. Knightsbridge operated at
least two boiler rooms, one located in Melville, New York, and the other in Boca Raton, Florida.
Knightsbridge managed the KPP Funds, both of which purported to offer several series of limited
liability company interests, which, in turn, invested in pre-IPO companies. Neither Knightsbridge
nor the KPP Funds have ever been registered with the Commission. Knightsbridge ceased
operations on March 8, 2019.
FACTS
Lisser Created Knightsbridge and Hid His History of Customer Complaints
17. Lisser, along with others, created Knightsbridge on or around October 1, 2018.
Before creating Knightsbridge, Lisser was fired by a registered broker-dealer because of customer
complaints alleging churning
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 and unauthorized trading.
18. Prior to working at that firm, Lisser had worked for five other broker-dealers, four
of which were subsequently de-registered by FINRA for various rule violations.
19. Lisser concealed from Knightsbridge’s investors and potential investors his history
of customer complaints and his prior association with broker-dealers that were de-registered by
FINRA
20. In communications with Knightsbridge’s investors, Lisser identified himself as
“Mark Allen,” omitting his last name to prevent investors from searching for him on the internet
and discovering his background. Likewise, Knightsbridge’s Delaware corporate filings refer to

2
 “Churning occurs when a securities broker enters into transactions and manages a client’s account
for the purposes of generating commissions and in disregard of his client’s interests.” Studer v. SEC,
No. 04-6646, 2008 U.S. App. LEXIS 837 at *4, 260 F. App’x 342, 343 (2d Cir. Jan. 15, 2008)
(internal quotations omitted).

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Lisser, the Manager, as “Mark Allen.” The Private Placement Memoranda (“PPMs”) for the KPP
Funds do not refer to Lisser at all; instead falsely naming an individual nominee, instead of Lisser, as
Knightsbridge’s manager.
21. At or around the same time that he created Knightsbridge, Lisser began operating
boiler rooms in Melville, New York, and in Boca Raton, Florida, to solicit investors to purchase
interests in the KPP Funds.
22. Lisser also contracted with another private entity (“LLC-1”) to operate an additional
boiler room. On or around October 16, 2018, Knightsbridge entered into a contract with LLC-1 to
“refer potential customers” to Knightsbridge, which would in turn “pay a front end referral fee of
seventy Percent gross profit (70%) in regard to purchase costs” and “fifty Percent (50%) of the back
end carried interest on any and all money or other consideration provided by the . . . Customers.”
23. Lisser hired approximately 20 individuals, including Salesperson 1, to staff his two
boiler rooms, and he provided at least some of the Knightsbridge Salespeople with a script to use
when cold-calling investors.
24. Lisser’s script included statements like, “Infonnation [sic] is king and nothing
happens on Wall Street without me knowing about it!”; “You know this is the right investment, and
you have to own it!”; “I have never in my life met anyone who wasn’t interested in making serious
money. (Firm) is making more serious money for people than anyone out there”; and “You can buy
this one with your eyes closed!”
25. During the relevant period, Lisser and the Knightsbridge Salespeople acting at
Lisser’s direction, cold-called hundreds of potential investors and raised approximately $2.1 million
from 71 investors by selling interests in the various purported series of the KPP Funds that Lisser

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claimed owned pre-IPO shares of Companies A, B and C.
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26. Companies A, B, and C were well-known private companies in the software and
transportation industries that were believed by the market to likely become public companies in the
near term through IPOs.
Lisser Materially Misrepresented the Cost of Investing in the Funds by Assuring
Investors That No Commissions Were Charged and That There Were No Mark-Ups
on the Price of Shares

27. In their pitch to potential investors, Lisser and the Knightsbridge Salespeople (at
Lisser’s direction) materially misrepresented the cost of investing in the KPP Funds by falsely
representing that Knightsbridge would not charge investors any mark-up on the price at which
Knightsbridge had purchased the pre-IPO shares and that Knightsbridge did not charge any upfront
commissions on the sales of interests in the KPP Funds.
28. The PPMs for the KPP Funds that Lisser and the Knightsbridge Salespeople
provided to at least some investors did not mention commissions or mark-ups to be paid to
Knightsbridge or the KPP Funds. Instead, the PPMs represented that Knightsbridge would be paid
a “management fee” that would “accrue commencing twelve (12) months after the Manager’s
acceptance of the Investor’s subscription for Interests and the applicable closing of Series Interest in
the Fund, and be equal to an aggregate of two percent (2%) of the Member’s aggregate Capital

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 Specifically, Lisser and Knightsbridge told investors that they were “investing in a specific Series of
the Fund,” each of which would “correlate to a specific investment of the Fund in a particular
Portfolio Company, or in a basket of Portfolio Companies,” and that distributions to investors
would be made “on a Series-by-Series basis and not on the Fund’s portfolio as a whole.”  Similarly,
the PPMs for the KPP Funds falsely stated that that investments would remain segregated by
“series.”  Notwithstanding Knightsbridge’s representations, no such “series” existed and all of the
investors’ funds were co-mingled, regardless of what stock the investor had decided to purchase. As
an individual associated with Knightsbridge (“Associate A”) explained to Salesperson 1, “the way
the cash flows through is an omnibus account, because who cares, it goes right into the underlying.”

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Contributions, and accrue as an obligation to the Fund due and payable upon a liquidation event.”
29. The PPMs expressly provided that “Except with respect to the Management Fee and
as otherwise set forth in the Operating Agreement, [Knightsbridge] or its affiliates shall bear the
expenses of the Fund (the ‘Fund Expenses’).” Under the Operating Agreement, Knightsbridge
“shall not charge any Member any expense Fee . . . or for any of the following Company expenses”
like office overhead or expenses of operating the company (emphasis added).
30. Lisser told investors, and instructed the Knightsbridge Salespeople to tell investors,
that instead of charging a mark-up or sales commissions, Knightsbridge was paid a “deferred
commission” or “carried interest” on the profits on the KPP Funds’ sales of the pre-IPO shares
after the company went public.
31. For example, on October 24, 2018, Lisser falsely told a potential investor:
“So basically now, you go straight to the fund, and the fund has with you a deferred
commission on the percentage of the profit that you make on the money. So we're
buying in volume. We're getting great prices. You get...the lowest prices...the lowest
prices we get, the more we all make...make on the deferred.
32. Lisser told another potential investor on that same day, “so the way it works is, there
is no commissions now. We’re on the same side of the investment.” When the investor asked,
“Right now your commission is nothing?,” Lisser replied, “Correct. Twenty percent of the profit. So
you are only paying commission once I get a profit.” In yet another conversation with a potential
investor that day, Lisser misrepresented, “We’re wholesale...and us giving it to you, there’s no
commission, there’s no fee, so this way you get it at cheaper rates, so we all make out.”
33. Notwithstanding the representations made to investors, Lisser paid the
Knightsbridge Salespeople commissions equal to approximately 5% of the amount of the
investments that they secured.
34. Lisser and Knightsbridge took steps to conceal the payments of commissions to the
Knightsbridge Salespeople so the potential investors would not know about them.

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35. When Salesperson 1 inquired about pay at an initial meeting with Knightsbridge on
October 17, 2018, Associate A explained that Knightsbridge hires its salespeople as independent
contractors and pays a “consulting fee we approximate, it’s like a working sales commission.”
Associate A noted that if the “consulting fee” is insufficient, Knightsbridge would give “periodic
bonuses, or on top of that, which top things out, even things out.” Associate A explained that, “We
don’t want to be perfect, maybe a little higher or lower” – in an effort to avoid the payments being
scrutinized as commissions – but that Knightsbridge seeks to be “more than fair.”
36. Another individual associated with Knightsbridge (“Associate B”) told Salesperson 1
that he could expect sales commissions of “about 5% on the front, 5% on the back,” meaning that
Knightsbridge paid Knightsbridge Salespeople commissions equal to 5% of all funds brought in
from investors, and 5% of the profits on those investor funds following distribution of the KPP
Funds’ profits. When Salesperson 1 asked if he should tell clients that Knightsbridge did not charge
commissions, Associate B explained that Salesperson 1 should only tell potential investors “about
the backend. That’s basically the way the fund, the fund earns its money, by...you know, you
know...sharing in the profit with them. So, we take 20% of the backend.”
37. Knightsbridge kept track of the undisclosed sales commissions that it paid to the
Knightsbridge Salespeople on a spreadsheet titled “Payout History” that explicitly called the
payments to the Knightsbridge Salespeople “Commissions.”
38. Lisser also tried to hide the sales commissions by making at least some of the
commission payments to the Knightsbridge Salespeople from his personal bank account and by
describing the payments in the memo section of the checks as being for “investor leads,” or by
transferring funds to another private entity (“LLC-2”) and making payments from LLC-2’s account.
39. On November 2, 2018, Salesperson 1 met Lisser at Knightsbridge’s offices to pick
up his commission check. At the meeting, Lisser handed Salesperson 1 a check from his personal

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bank account for $1,250, equal to five percent of the $25,000 in sales that Salesperson 1 had made.
Lisser also told Salesperson 1 that other Knightsbridge Salespeople were also given “commission
checks.”
40. In addition to paying the Knightsbridge Salespeople upfront sales commissions,
Lisser charged investors a significant mark-up on the price of the pre-IPO shares. The chart below
reflects the average cost at which Knightsbridge bought the pre-IPO shares as compared to the
price at which it sold the shares to investors through the KPP Funds:
Company Average Price at
which Knightsbridge
Purchased Shares
Average Price at
which Knightsbridge
Sold Shares
Average
Mark- Up per
Share
% Mark-
Up
Company A $53.79                                $61.14                                $7.62                                14%
Company B  $53.02                                $62.08                                $9.06                                17%
Company C $5.17                                  $8.38                                  $3.21                                  62%

41. Lisser, who either signed the subscription agreements for the purchase of the shares
of pre-IPO companies for Knightsbridge or received drafts of such agreements (which included the
per share price), knew the actual cost of acquiring the shares of Companies A, B, and C. Lisser also
knew how much investors paid for their interests in the Funds. As such, Lisser knew that
Knightsbridge was marking-up the price per share at which investors acquired their interests.
Lisser Materially Misrepresented Knightsbridge’s Ownership of the Pre-IPO
Securities

42. In their pitch to potential investors, Lisser, and the Knightsbridge Salespeople at
Lisser’s direction, also falsely represented that Knightsbridge had already purchased directly from
employees of the three companies the pre-IPO securities that it was offering through the KPP
Funds, and that this distinguished Knightsbridge from other funds selling pre-IPO securities.
43. For example, on October 31, 2018, during a call in which Lisser pitched a potential

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investor shares of Company A, the person asked, “Who has those shares now? Your fund or are you
buying those from another fund?” Lisser falsely replied, “we’re on the cap table.
4
 We own the
shares. So, you, you you are joining our fund, our company, so you’re going to own your amount of
shares directly.” The investor asked, “That was my question. Whether you are going through
another fund.” Lisser replied, “That’s the biggest thing, correct, yeah, because when, other places,
they’ll take deposits, then they’ll go and write contracts and they’ll try to get the stock and then
things would change. I don’t even know how they – that’s Kosher. We have the stock through
ROFR, through first right of restriction.”
44. On another call, on October 24, 2018, Lisser falsely informed a potential investor,
“I’m picking [shares of Company C] up at ah, six, six six fifty from the employee himself. I’m
picking up 300 grand. So I deal directly with the employee.” Lisser added: “We’re on the cap table.

So...we can take in the stock. We are on [Company A]’s cap table, [Company B]’s, soon to be
closed, and uh [Company C]’s.”
45.  On the same day, Lisser falsely told another potential investor, “We’re in with the
employees, and we’re approved with the company’s cap table, so on [Company A’s] cap table, uh
we’re approved to transact business with employees of theirs and buy stock from their employees.
So we’re doing a $3 million lot, we’re closing today.”
46. Lisser also directed the Knightsbridge Salespeople to make misrepresentations
concerning Knightsbridge’s ownership of shares. On October 24, 2018, a potential investor asked
Salesperson 1 to confirm that “Knightsbridge owns those shares [of Company A].” Salesperson 1,
who was speaking to the investor on speakerphone, put the investor on mute, and Lisser directed
Salesperson 1 to inform the investor that “Knightsbridge sits on the cap table, we buy the stock

4
 A “cap table” or a “capitalization table” is a list a company maintains that reflects the equity
ownership of the company.

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from [Company A], we own them and [the investor] own[s] a piece of us.” Salesperson 1 then told
the potential investor what Lisser had told him to say while Lisser listened to the call.
47. Contrary to the representations that Lisser and the Knightsbridge Salespeople made
to investors, the KPP Funds never purchased any pre-IPO shares directly from Companies A, B, C
or from the employees of those companies.
48. Instead, Knightsbridge (as opposed to the KPP Funds) entered into several
subscription agreements and share purchase agreements to purchase the pre-IPO shares of the three
companies largely from two unregistered investment funds. In some cases, these agreements
purported to transfer the shares directly to Knightsbridge. In other cases, these agreements
purported to transfer an interest in a fund that held such shares. In neither case, did Knightsbridge
or the KPP Funds hold the pre-IPO shares of the three companies directly.
49. Thus, Lisser’s statements to investors that Knightsbridge was “on the cap table” and
thus directly held shares of the pre-IPO shares were false. Indeed, by purchasing shares or interests
in shares from third parties (instead of from the companies themselves or their employees),
Knightsbridge introduced undisclosed risk in the transactions: Knightsbridge’s ability to distribute
shares to investors of the KPP Funds was contingent on third parties fulfilling their contractual
obligations to Knightsbridge.
50. Moreover, contrary to the representations of Lisser and the Knightsbridge
Salespeople, Knightsbridge had not yet purchased the pre-IPO shares at the time that it began
marketing and selling interests in the KPP Funds to the investors. This introduced further
undisclosed risk in the transactions because there was no guarantee that Lisser and Knightsbridge
would, in fact, be able to purchase the necessary shares of the three companies at all or at an
advantageous price.
51. Although Knightsbridge marketed and sold interests in Companies A, B, and C

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starting in October 2018, Knightsbridge did not actually purchase any interest in the pre-IPO shares
of Company A until December 2018, in the pre-IPO shares of Company B until January 2019, and
in the pre-IPO shares of Company C until February 2019, as described below:
(a) On December 24, 2018, Knightsbridge first purchased its own interest in
shares of Company A by paying $224,410 to a third party, noting in the wire
that it was for “[Company A] (4274 shares).” By that date, Knightsbridge had
already raised $238,646.20 from twelve investors for interests in the shares of
Company A.
(b) On January 16, 2019, Knightsbridge first purchased its own interest in shares
of Company B by paying $355,697.60 to a third party. By that date,
Knightsbridge had already raised $512,198 from twelve investors for interests
in shares of Company B.
(c) On February 20, 2019, Knightsbridge first purchased its own interests in
shares of Company C by paying $425,000 to a third party. By that date,
Knightsbridge had already raised $1,210,840 from 45 investors for interests
in shares of Company C.
52. Lisser ultimately only used $1.2 million of the $2.1 million of proceeds that
Knightsbridge raised from investors to fund Knightsbridge’s purchases of pre-IPO securities that
Knightsbridge had told investors it already owned.
53. As of March 2019, Knightsbridge had used investor funds to acquire interest in
enough pre-IPO shares of Company A and Company B to cover its sales of interests in those shares
to its investors, but it had not purchased, and was financially unable to purchase, 67,649 shares of
Company C that Knightsbridge had already re-sold to investors:

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Company Shares Sold to
Investors
Shares Purchased by
Knightsbridge
Shortfall
Company A 4,408                               5,987
Company B 8,411                               8,550
Company C 150,503 82,254 67,649

54. Knightsbridge paid an average price of $5.17 per share for the Company C shares
that it purchased. Therefore, it would have needed an additional $349,745 to cover the shortfall.
55. On March 8, 2019, when Knightsbridge ceased operations, it only had approximately
$70,000 in its bank accounts and thus did not have the means to purchase enough additional shares
of Company C to cover the shares that the investors had purchased.
Lisser Misappropriated Funds Solicited from Investors Including for His Personal
Gain

56. The $2.1 million that Knightsbridge raised from investors was directed to a
Knightsbridge bank account, for which Lisser was the sole signatory.
57. As described above, Lisser arranged to use about $1.2 million of the investors’ funds
to purchase interests in pre-IPO shares from third parties.
58. Lisser misappropriated the remaining $900,000.
59. From December 2018 through February 2019, Lisser transferred approximately
$47,000 from the Knightsbridge bank account to pay credit card bills.
60. From November 2018 through February 2019, Lisser transferred approximately
$60,000 from the Knightsbridge bank account to his personal bank account.
61. In October 2018, Lisser transferred approximately $43,000 from the Knightsbridge
bank account to a personal business account.
62. Before creating Knightsbridge, two individuals associated with Knightsbridge (the

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“Knightsbridge Associates”) created LLC-2 and opened a bank account in the name of the entity.
Lisser was added as an authorized signatory for the account in late July 2018. Between November
2018 and February 2019, Lisser transferred $310,500 from Knightsbridge to LLC-2, of which at least
$37,306 was then transferred to Lisser. LLC-2 also transferred at least $138,000 to other individuals
associated with Knightsbridge, in part for apparent commission payments.  In addition, Lisser
and/or the Knightsbridge Associates withdrew approximately $18,000 from LLC-2’s bank account
in cash or cash equivalents, and used significant additional amounts for apparent personal expenses
like credit card payments (over $16,000), car-related payments (over $12,000), gym fees, and retail
and food purchases.
63. Moreover, despite the fact that the PPMs stated that Knightsbridge “will be
responsible for the day-to-day operations of the Fund,” Lisser used investor funds to pay
Knightsbridge’s expenses, including $29,000 to pay sales commissions to the Knightsbridge
Salespeople (in addition to the amounts paid from LLC-2); $19,571 to make a mortgage payment for
office space; and approximately $281,000 to make payments to LLC-1, which had contracted to
“refer” customers to Knightsbridge.
FIRST CLAIM FOR RELIEF
Violations of Securities Act Section 17(a)

64. The Commission re-alleges and incorporates by reference herein each and every
allegation contained in paragraphs 1 through 63 of this Complaint.
65. Defendant, directly or indirectly, singly or in concert, in the offer or sale of securities
and by the use of the means or instruments of transportation or communication in interstate
commerce or the mails, (1) knowingly or recklessly have employed one or more devices, schemes or
artifices to defraud, (2) knowingly, recklessly, or negligently have obtained money or property by
means of one or more untrue statements of a material fact or omissions of a material fact necessary

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in order to make the statements made, in light of the circumstances under which they were made,
not misleading, and/or (3) knowingly, recklessly, or negligently have engaged in one or more
transactions, practices, or courses of business which operated or would operate as a fraud or deceit
upon the purchaser.
66. By reason of the foregoing, Defendant, directly or indirectly, singly or in concert, has
violated and, unless enjoined, will again violate Securities Act Section 17(a) [15 U.S.C. § 77q(a)].
SECOND CLAIM FOR RELIEF
Violation of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder

67. The Commission re-alleges and incorporates by reference here the allegations in
paragraphs 1 through 63.
68. Defendants, directly or indirectly, singly or in concert, in connection with the
purchase or sale of securities and by the use of means or instrumentalities of interstate commerce, or
the mails, or the facilities of a national securities exchange, knowingly or recklessly have (i) employed
one or more devices, schemes, or artifices to defraud, (ii) made one or more untrue statements of a
material fact or omitted to state one or more material facts necessary in order to make the
statements made, in light of the circumstances under which they were made, not misleading, and/or
(iii) engaged in one or more acts, practices, or courses of business which operated or would operate
as a fraud or deceit upon other persons.
69. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert,
have violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. § 78j(b)]
and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].

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PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that the Court enter a Final
Judgment:
I.
Permanently enjoining Lisser and his agents, servants, employees and attorneys and all
persons in active concert or participation with him, from violating, directly or indirectly, Securities
Act Section 17(a) [15 U.S.C. § 77q(a)] and Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule
10b-5 thereunder [17 C.F.R. § 240.10b-5].
II.
 Ordering Lisser to disgorge all ill-gotten gains he received directly or indirectly, with pre-
judgment interest thereon, as a result of the alleged violations;
III.
Ordering Lisser to pay civil monetary penalties under Securities Act Section 20(d) [15 U.S.C.
§ 77t(d)] and Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)]; and
IV.
 Granting any other and further relief this Court may deem just and proper.

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Dated:   December 1, 2020
New York, New York

                                                                        By:                        /s/            Richard            R.            Best
                                                                        RICHARD            R.            BEST
      REGIONAL DIRECTOR
      Sanjay Wadhwa
      Michael Paley
      Todd D. Brody
      Tejal D. Shah
      Hane L. Kim
                                                                        SECURITIES            AND            EXCHANGE            COMMISSION
      New York Regional Office
      Brookfield Place
                                                                        200            Vesey            Street,            Suite            400
      New York, New York 10281-1022
                                                                        (212)            336-0080            (Brody)
      [email protected]

1 
 

RICHARD R. BEST 
REGIONAL DIRECTOR 
Sanjay Wadhwa 
Michael Paley 
Todd Brody 
Tejal D. Shah 
Hane L. Kim 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
200 Vesey Street, Suite 400 
New York, New York 10281-1022 
(212) 336-0080 (Brody) 
[email protected] 
 
UNITED STATES DISTRICT COURT 
EASTERN DISTRICT OF NEW YORK 
 
 
SECURITIES AND EXCHANGE COMMISSION, 
 
     Plaintiff, 
 

-against- 
 

MARK ALAN LISSER a/k/a MARK ALAN a/k/a 
MARK ALLEN 
 
     Defendant. 
 

 
 
 COMPLAINT 
 
            20 Civ. 5798 (    ) 
  
 
 
            JURY TRIAL 
            DEMANDED 

 
 Plaintiff Securities and Exchange Commission (“Commission”), for its Complaint against 

Defendant Mark Alan Lisser a/k/a Mark Alan a/k/a Mark Allen (“Defendant” or “Lisser”), alleges 

as follows: 

SUMMARY  

1. The Commission brings this civil enforcement action against Lisser for orchestrating 

a fraudulent scheme in which he operated at least two “boiler rooms”1 through which he raised 

                                                 
1 “‘Boiler room’ activity consists essentially of offering to customers securities of certain issuers in 
large volume by means of an intensive selling campaign through numerous salesmen by telephone or 

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approximately $2.1 million by selling interests in purported investment funds to approximately 71 

investors and then misappropriated approximately $900,000 of the investors’ funds. 

2. From approximately October 2018 to March 2019, Lisser operated Knightsbridge 

Capital Partners (“Knightsbridge”), an unregistered fund manager that managed KPP Late Stage 

LLC and KPP Late Stage Investment Fund I LLC (collectively, the “KPP Funds”). The KPP Funds 

purported to own stock in at least three “pre-IPO” companies (that is, private companies that were 

likely to become public companies in the near term through an initial public offering (“IPO”)).  

3. Lisser secured investors for the KPP Funds through at least two boiler rooms, in 

which he directed over 20 salespeople (the “Knightsbridge Salespeople”) to cold-call potential 

investors and to use high-pressure sales tactics to solicit investments. Lisser and the Knightsbridge 

Salespeople told most investors that if they purchased an interest in one of the KPP Funds, they 

would hold a pro rata share of the pre-IPO stock held by that fund. 

4. Lisser falsely told potential investors (and instructed the Knightsbridge Salespeople 

to do the same) that Knightsbridge was not charging any mark-ups or commissions on its sales of 

interests in pre-IPO securities through the KPP Funds. Instead, Lisser assured investors that 

Knightsbridge only profited by charging investors a fee based on the profits after the pre-IPO 

companies went public, such that Knightsbridge and the investors were on the “same side of the 

trade.” In truth, Knightsbridge both marked up the price of the shares of the pre-IPO companies by 

14% to 62% and also paid the Knightsbridge Salespeople upfront commissions on all of their sales. 

5. Lisser also falsely told investors that Knightsbridge had already purchased directly 

from the employees of the respective companies the pre-IPO securities that Knightsbridge was 

                                                 
direct mail, without regard to the suitability to the needs of the customer, in such a manner as to 
induce a hasty decision to buy the security being offered without disclosure of the material facts 
about the issuer.” SEC v. R.J. Allen & Assocs., Inc., 286 F. Supp. 866, 874 (S.D. Fla. 1974). 

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offering to sell through the KPP Funds, and instructed the Knightsbridge Salespeople to do the 

same. Instead, Knightsbridge did not purchase any pre-IPO shares until it began raising money from 

investors. Moreover, it did not purchase the shares from the employees or from the pre-IPO 

companies themselves but, instead, bought interests in such shares from third-parties. As such, 

Lisser misrepresented the risk of the investment in the KPP Funds.  

6. Of the approximately $2.1 million raised from investors, Lisser only used about $1.2 

million for investments. As of March 8, 2019, when it stopped operating, Knightsbridge had used 

investor funds to acquire enough interests in shares of two pre-IPO companies to cover its sales of 

shares of those companies to its customers, but it was short over 65,000 shares of a third pre-IPO 

company, and did not have the funds necessary to purchase those shares. 

7. Lisser misappropriated approximately $900,000 of the investor funds, including by 

sending about $103,000 to his personal and business bank accounts and using about $47,000 to pay 

credit card bills.  

VIOLATIONS 

8. By virtue of the foregoing conduct and as alleged further herein, Lisser has violated 

Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)], and Section 10(b) 

of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 

thereunder [17 C.F.R. § 240.10b-5]. 

9. Unless Lisser is restrained and enjoined, he will again engage in the acts, practices, 

transactions and courses of business set forth in this Complaint or in acts, practices, transactions and 

courses of business of similar type and object. 

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

10. The Commission brings this action pursuant to authority conferred by Section 20(b) 

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

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11. The Commission seeks a final judgment: (a) permanently enjoining Lisser from 

violating the federal securities laws and rules this Complaint alleges he has violated; (b) ordering 

Lisser to disgorge ill-gotten gains he received as a result of the violations alleged here and to pay 

prejudgment interest thereon; (c) ordering Lisser to pay civil money penalties pursuant to Section 

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

§ 78u(d)(3)]; and (d) ordering any other and further relief the Court may deem just and proper. 

JURISDICTION AND VENUE 

12. This Court has jurisdiction over this action pursuant to Securities Act Section 22(a) 

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

13. Lisser, directly and indirectly, has made use of the means or instrumentalities of 

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

of business alleged herein. 

14. Venue lies in this District under Securities Act Section 22(a) [15 U.S.C. § 77v(a)] and 

Exchange Act Section 27 [15 U.S.C. § 78aa]. Lisser is an inhabitant of the Eastern District of New 

York, and certain of the acts, practices, transactions, and courses of business alleged in this 

Complaint occurred within this District, including that Knightsbridge was located in North 

Bellmore, New York, and one of the boiler rooms that Lisser operated was located in Melville, New 

York. 

DEFENDANT 

15. Lisser, age 40, resides in Massapequa, New York. During the relevant period, Lisser 

was a principal and manager of Knightsbridge. Lisser was registered with the Financial Industry 

Regulatory Authority (“FINRA”) as a registered representative from 2001 to 2016 and held the 

Series 7 and 63 licenses. 

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OTHER RELEVANT ENTITIES 

16. Knightsbridge is a Delaware limited liability company incorporated on October 1, 

2018, with its principal place of business in North Bellmore, New York. Knightsbridge operated at 

least two boiler rooms, one located in Melville, New York, and the other in Boca Raton, Florida. 

Knightsbridge managed the KPP Funds, both of which purported to offer several series of limited 

liability company interests, which, in turn, invested in pre-IPO companies. Neither Knightsbridge 

nor the KPP Funds have ever been registered with the Commission. Knightsbridge ceased 

operations on March 8, 2019. 

FACTS 

Lisser Created Knightsbridge and Hid His History of Customer Complaints 

17. Lisser, along with others, created Knightsbridge on or around October 1, 2018. 

Before creating Knightsbridge, Lisser was fired by a registered broker-dealer because of customer 

complaints alleging churning2 and unauthorized trading. 

18. Prior to working at that firm, Lisser had worked for five other broker-dealers, four 

of which were subsequently de-registered by FINRA for various rule violations.  

19. Lisser concealed from Knightsbridge’s investors and potential investors his history 

of customer complaints and his prior association with broker-dealers that were de-registered by 

FINRA 

20. In communications with Knightsbridge’s investors, Lisser identified himself as 

“Mark Allen,” omitting his last name to prevent investors from searching for him on the internet 

and discovering his background. Likewise, Knightsbridge’s Delaware corporate filings refer to 

                                                 
2 “Churning occurs when a securities broker enters into transactions and manages a client’s account 
for the purposes of generating commissions and in disregard of his client’s interests.” Studer v. SEC, 
No. 04-6646, 2008 U.S. App. LEXIS 837 at *4, 260 F. App’x 342, 343 (2d Cir. Jan. 15, 2008) 
(internal quotations omitted). 

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Lisser, the Manager, as “Mark Allen.” The Private Placement Memoranda (“PPMs”) for the KPP 

Funds do not refer to Lisser at all; instead falsely naming an individual nominee, instead of Lisser, as 

Knightsbridge’s manager. 

21. At or around the same time that he created Knightsbridge, Lisser began operating 

boiler rooms in Melville, New York, and in Boca Raton, Florida, to solicit investors to purchase 

interests in the KPP Funds.  

22. Lisser also contracted with another private entity (“LLC-1”) to operate an additional 

boiler room. On or around October 16, 2018, Knightsbridge entered into a contract with LLC-1 to 

“refer potential customers” to Knightsbridge, which would in turn “pay a front end referral fee of 

seventy Percent gross profit (70%) in regard to purchase costs” and “fifty Percent (50%) of the back 

end carried interest on any and all money or other consideration provided by the . . . Customers.” 

23. Lisser hired approximately 20 individuals, including Salesperson 1, to staff his two 

boiler rooms, and he provided at least some of the Knightsbridge Salespeople with a script to use 

when cold-calling investors. 

24. Lisser’s script included statements like, “Infonnation [sic] is king and nothing 

happens on Wall Street without me knowing about it!”; “You know this is the right investment, and 

you have to own it!”; “I have never in my life met anyone who wasn’t interested in making serious 

money. (Firm) is making more serious money for people than anyone out there”; and “You can buy 

this one with your eyes closed!” 

25. During the relevant period, Lisser and the Knightsbridge Salespeople acting at 

Lisser’s direction, cold-called hundreds of potential investors and raised approximately $2.1 million 

from 71 investors by selling interests in the various purported series of the KPP Funds that Lisser 

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claimed owned pre-IPO shares of Companies A, B and C.3 

26. Companies A, B, and C were well-known private companies in the software and 

transportation industries that were believed by the market to likely become public companies in the 

near term through IPOs. 

Lisser Materially Misrepresented the Cost of Investing in the Funds by Assuring 
Investors That No Commissions Were Charged and That There Were No Mark-Ups 
on the Price of Shares 

 
27. In their pitch to potential investors, Lisser and the Knightsbridge Salespeople (at 

Lisser’s direction) materially misrepresented the cost of investing in the KPP Funds by falsely 

representing that Knightsbridge would not charge investors any mark-up on the price at which 

Knightsbridge had purchased the pre-IPO shares and that Knightsbridge did not charge any upfront 

commissions on the sales of interests in the KPP Funds. 

28. The PPMs for the KPP Funds that Lisser and the Knightsbridge Salespeople 

provided to at least some investors did not mention commissions or mark-ups to be paid to 

Knightsbridge or the KPP Funds. Instead, the PPMs represented that Knightsbridge would be paid 

a “management fee” that would “accrue commencing twelve (12) months after the Manager’s 

acceptance of the Investor’s subscription for Interests and the applicable closing of Series Interest in 

the Fund, and be equal to an aggregate of two percent (2%) of the Member’s aggregate Capital 

                                                 
3 Specifically, Lisser and Knightsbridge told investors that they were “investing in a specific Series of 
the Fund,” each of which would “correlate to a specific investment of the Fund in a particular 
Portfolio Company, or in a basket of Portfolio Companies,” and that distributions to investors 
would be made “on a Series-by-Series basis and not on the Fund’s portfolio as a whole.”  Similarly, 
the PPMs for the KPP Funds falsely stated that that investments would remain segregated by 
“series.”  Notwithstanding Knightsbridge’s representations, no such “series” existed and all of the 
investors’ funds were co-mingled, regardless of what stock the investor had decided to purchase. As 
an individual associated with Knightsbridge (“Associate A”) explained to Salesperson 1, “the way 
the cash flows through is an omnibus account, because who cares, it goes right into the underlying.” 

 

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Contributions, and accrue as an obligation to the Fund due and payable upon a liquidation event.” 

29. The PPMs expressly provided that “Except with respect to the Management Fee and 

as otherwise set forth in the Operating Agreement, [Knightsbridge] or its affiliates shall bear the 

expenses of the Fund (the ‘Fund Expenses’).” Under the Operating Agreement, Knightsbridge 

“shall not charge any Member any expense Fee . . . or for any of the following Company expenses” 

like office overhead or expenses of operating the company (emphasis added). 

30. Lisser told investors, and instructed the Knightsbridge Salespeople to tell investors, 

that instead of charging a mark-up or sales commissions, Knightsbridge was paid a “deferred 

commission” or “carried interest” on the profits on the KPP Funds’ sales of the pre-IPO shares 

after the company went public. 

31. For example, on October 24, 2018, Lisser falsely told a potential investor: 

“So basically now, you go straight to the fund, and the fund has with you a deferred 
commission on the percentage of the profit that you make on the money. So we're 
buying in volume. We're getting great prices. You get…the lowest prices…the lowest 
prices we get, the more we all make…make on the deferred.  

32. Lisser told another potential investor on that same day, “so the way it works is, there 

is no commissions now. We’re on the same side of the investment.” When the investor asked, 

“Right now your commission is nothing?,” Lisser replied, “Correct. Twenty percent of the profit. So 

you are only paying commission once I get a profit.” In yet another conversation with a potential 

investor that day, Lisser misrepresented, “We’re wholesale…and us giving it to you, there’s no 

commission, there’s no fee, so this way you get it at cheaper rates, so we all make out.”  

33. Notwithstanding the representations made to investors, Lisser paid the 

Knightsbridge Salespeople commissions equal to approximately 5% of the amount of the 

investments that they secured. 

34. Lisser and Knightsbridge took steps to conceal the payments of commissions to the 

Knightsbridge Salespeople so the potential investors would not know about them. 

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35. When Salesperson 1 inquired about pay at an initial meeting with Knightsbridge on 

October 17, 2018, Associate A explained that Knightsbridge hires its salespeople as independent 

contractors and pays a “consulting fee we approximate, it’s like a working sales commission.” 

Associate A noted that if the “consulting fee” is insufficient, Knightsbridge would give “periodic 

bonuses, or on top of that, which top things out, even things out.” Associate A explained that, “We 

don’t want to be perfect, maybe a little higher or lower” – in an effort to avoid the payments being 

scrutinized as commissions – but that Knightsbridge seeks to be “more than fair.” 

36. Another individual associated with Knightsbridge (“Associate B”) told Salesperson 1 

that he could expect sales commissions of “about 5% on the front, 5% on the back,” meaning that 

Knightsbridge paid Knightsbridge Salespeople commissions equal to 5% of all funds brought in 

from investors, and 5% of the profits on those investor funds following distribution of the KPP 

Funds’ profits. When Salesperson 1 asked if he should tell clients that Knightsbridge did not charge 

commissions, Associate B explained that Salesperson 1 should only tell potential investors “about 

the backend. That’s basically the way the fund, the fund earns its money, by…you know, you 

know…sharing in the profit with them. So, we take 20% of the backend.” 

37. Knightsbridge kept track of the undisclosed sales commissions that it paid to the 

Knightsbridge Salespeople on a spreadsheet titled “Payout History” that explicitly called the 

payments to the Knightsbridge Salespeople “Commissions.” 

38. Lisser also tried to hide the sales commissions by making at least some of the 

commission payments to the Knightsbridge Salespeople from his personal bank account and by 

describing the payments in the memo section of the checks as being for “investor leads,” or by 

transferring funds to another private entity (“LLC-2”) and making payments from LLC-2’s account. 

39. On November 2, 2018, Salesperson 1 met Lisser at Knightsbridge’s offices to pick 

up his commission check. At the meeting, Lisser handed Salesperson 1 a check from his personal 

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bank account for $1,250, equal to five percent of the $25,000 in sales that Salesperson 1 had made. 

Lisser also told Salesperson 1 that other Knightsbridge Salespeople were also given “commission 

checks.” 

40. In addition to paying the Knightsbridge Salespeople upfront sales commissions, 

Lisser charged investors a significant mark-up on the price of the pre-IPO shares. The chart below 

reflects the average cost at which Knightsbridge bought the pre-IPO shares as compared to the 

price at which it sold the shares to investors through the KPP Funds:  

Company Average Price at 
which Knightsbridge 
Purchased Shares  

Average Price at 
which Knightsbridge 
Sold Shares 

Average 
Mark- Up per 
Share 

% Mark-
Up 

Company A $53.79 $61.14 $7.62 14% 

Company B  $53.02 $62.08 $9.06 17% 

Company C $5.17 $8.38 $3.21 62% 

 

41. Lisser, who either signed the subscription agreements for the purchase of the shares 

of pre-IPO companies for Knightsbridge or received drafts of such agreements (which included the 

per share price), knew the actual cost of acquiring the shares of Companies A, B, and C. Lisser also 

knew how much investors paid for their interests in the Funds. As such, Lisser knew that 

Knightsbridge was marking-up the price per share at which investors acquired their interests. 

Lisser Materially Misrepresented Knightsbridge’s Ownership of the Pre-IPO 
Securities  
 
42. In their pitch to potential investors, Lisser, and the Knightsbridge Salespeople at 

Lisser’s direction, also falsely represented that Knightsbridge had already purchased directly from 

employees of the three companies the pre-IPO securities that it was offering through the KPP 

Funds, and that this distinguished Knightsbridge from other funds selling pre-IPO securities. 

43. For example, on October 31, 2018, during a call in which Lisser pitched a potential 

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investor shares of Company A, the person asked, “Who has those shares now? Your fund or are you 

buying those from another fund?” Lisser falsely replied, “we’re on the cap table.4 We own the 

shares. So, you, you you are joining our fund, our company, so you’re going to own your amount of 

shares directly.” The investor asked, “That was my question. Whether you are going through 

another fund.” Lisser replied, “That’s the biggest thing, correct, yeah, because when, other places, 

they’ll take deposits, then they’ll go and write contracts and they’ll try to get the stock and then 

things would change. I don’t even know how they – that’s Kosher. We have the stock through 

ROFR, through first right of restriction.” 

44. On another call, on October 24, 2018, Lisser falsely informed a potential investor, 

“I’m picking [shares of Company C] up at ah, six, six six fifty from the employee himself. I’m 

picking up 300 grand. So I deal directly with the employee.” Lisser added: “We’re on the cap table. 

So…we can take in the stock. We are on [Company A]’s cap table, [Company B]’s, soon to be 

closed, and uh [Company C]’s.”   

45.  On the same day, Lisser falsely told another potential investor, “We’re in with the 

employees, and we’re approved with the company’s cap table, so on [Company A’s] cap table, uh 

we’re approved to transact business with employees of theirs and buy stock from their employees. 

So we’re doing a $3 million lot, we’re closing today.”   

46. Lisser also directed the Knightsbridge Salespeople to make misrepresentations 

concerning Knightsbridge’s ownership of shares. On October 24, 2018, a potential investor asked 

Salesperson 1 to confirm that “Knightsbridge owns those shares [of Company A].” Salesperson 1, 

who was speaking to the investor on speakerphone, put the investor on mute, and Lisser directed 

Salesperson 1 to inform the investor that “Knightsbridge sits on the cap table, we buy the stock 

                                                 
4 A “cap table” or a “capitalization table” is a list a company maintains that reflects the equity 
ownership of the company. 

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from [Company A], we own them and [the investor] own[s] a piece of us.” Salesperson 1 then told 

the potential investor what Lisser had told him to say while Lisser listened to the call. 

47. Contrary to the representations that Lisser and the Knightsbridge Salespeople made 

to investors, the KPP Funds never purchased any pre-IPO shares directly from Companies A, B, C 

or from the employees of those companies. 

48. Instead, Knightsbridge (as opposed to the KPP Funds) entered into several 

subscription agreements and share purchase agreements to purchase the pre-IPO shares of the three 

companies largely from two unregistered investment funds. In some cases, these agreements 

purported to transfer the shares directly to Knightsbridge. In other cases, these agreements 

purported to transfer an interest in a fund that held such shares. In neither case, did Knightsbridge 

or the KPP Funds hold the pre-IPO shares of the three companies directly. 

49. Thus, Lisser’s statements to investors that Knightsbridge was “on the cap table” and 

thus directly held shares of the pre-IPO shares were false. Indeed, by purchasing shares or interests 

in shares from third parties (instead of from the companies themselves or their employees), 

Knightsbridge introduced undisclosed risk in the transactions: Knightsbridge’s ability to distribute 

shares to investors of the KPP Funds was contingent on third parties fulfilling their contractual 

obligations to Knightsbridge.  

50. Moreover, contrary to the representations of Lisser and the Knightsbridge 

Salespeople, Knightsbridge had not yet purchased the pre-IPO shares at the time that it began 

marketing and selling interests in the KPP Funds to the investors. This introduced further 

undisclosed risk in the transactions because there was no guarantee that Lisser and Knightsbridge 

would, in fact, be able to purchase the necessary shares of the three companies at all or at an 

advantageous price. 

51. Although Knightsbridge marketed and sold interests in Companies A, B, and C 

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starting in October 2018, Knightsbridge did not actually purchase any interest in the pre-IPO shares 

of Company A until December 2018, in the pre-IPO shares of Company B until January 2019, and 

in the pre-IPO shares of Company C until February 2019, as described below: 

(a) On December 24, 2018, Knightsbridge first purchased its own interest in 

shares of Company A by paying $224,410 to a third party, noting in the wire 

that it was for “[Company A] (4274 shares).” By that date, Knightsbridge had 

already raised $238,646.20 from twelve investors for interests in the shares of 

Company A.   

(b) On January 16, 2019, Knightsbridge first purchased its own interest in shares 

of Company B by paying $355,697.60 to a third party. By that date, 

Knightsbridge had already raised $512,198 from twelve investors for interests 

in shares of Company B.   

(c) On February 20, 2019, Knightsbridge first purchased its own interests in 

shares of Company C by paying $425,000 to a third party. By that date, 

Knightsbridge had already raised $1,210,840 from 45 investors for interests 

in shares of Company C.   

52. Lisser ultimately only used $1.2 million of the $2.1 million of proceeds that 

Knightsbridge raised from investors to fund Knightsbridge’s purchases of pre-IPO securities that 

Knightsbridge had told investors it already owned. 

53. As of March 2019, Knightsbridge had used investor funds to acquire interest in 

enough pre-IPO shares of Company A and Company B to cover its sales of interests in those shares 

to its investors, but it had not purchased, and was financially unable to purchase, 67,649 shares of 

Company C that Knightsbridge had already re-sold to investors:  

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Company Shares Sold to 
Investors 

Shares Purchased by 
Knightsbridge 

Shortfall 

Company A 4,408 5,987  

Company B 8,411 8,550  

Company C 150,503 82,254 67,649 

 

54. Knightsbridge paid an average price of $5.17 per share for the Company C shares 

that it purchased. Therefore, it would have needed an additional $349,745 to cover the shortfall.  

55. On March 8, 2019, when Knightsbridge ceased operations, it only had approximately 

$70,000 in its bank accounts and thus did not have the means to purchase enough additional shares 

of Company C to cover the shares that the investors had purchased. 

Lisser Misappropriated Funds Solicited from Investors Including for His Personal 
Gain 

 
56. The $2.1 million that Knightsbridge raised from investors was directed to a 

Knightsbridge bank account, for which Lisser was the sole signatory.  

57. As described above, Lisser arranged to use about $1.2 million of the investors’ funds 

to purchase interests in pre-IPO shares from third parties. 

58. Lisser misappropriated the remaining $900,000.  

59. From December 2018 through February 2019, Lisser transferred approximately 

$47,000 from the Knightsbridge bank account to pay credit card bills. 

60. From November 2018 through February 2019, Lisser transferred approximately 

$60,000 from the Knightsbridge bank account to his personal bank account. 

61. In October 2018, Lisser transferred approximately $43,000 from the Knightsbridge 

bank account to a personal business account. 

62. Before creating Knightsbridge, two individuals associated with Knightsbridge (the 

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“Knightsbridge Associates”) created LLC-2 and opened a bank account in the name of the entity. 

Lisser was added as an authorized signatory for the account in late July 2018. Between November 

2018 and February 2019, Lisser transferred $310,500 from Knightsbridge to LLC-2, of which at least 

$37,306 was then transferred to Lisser. LLC-2 also transferred at least $138,000 to other individuals 

associated with Knightsbridge, in part for apparent commission payments.  In addition, Lisser 

and/or the Knightsbridge Associates withdrew approximately $18,000 from LLC-2’s bank account 

in cash or cash equivalents, and used significant additional amounts for apparent personal expenses 

like credit card payments (over $16,000), car-related payments (over $12,000), gym fees, and retail 

and food purchases. 

63. Moreover, despite the fact that the PPMs stated that Knightsbridge “will be 

responsible for the day-to-day operations of the Fund,” Lisser used investor funds to pay 

Knightsbridge’s expenses, including $29,000 to pay sales commissions to the Knightsbridge 

Salespeople (in addition to the amounts paid from LLC-2); $19,571 to make a mortgage payment for 

office space; and approximately $281,000 to make payments to LLC-1, which had contracted to 

“refer” customers to Knightsbridge. 

FIRST CLAIM FOR RELIEF 

Violations of Securities Act Section 17(a) 
 

64. The Commission re-alleges and incorporates by reference herein each and every 

allegation contained in paragraphs 1 through 63 of this Complaint. 

65. Defendant, directly or indirectly, singly or in concert, in the offer or sale of securities 

and by the use of the means or instruments of transportation or communication in interstate 

commerce or the mails, (1) knowingly or recklessly have employed one or more devices, schemes or 

artifices to defraud, (2) knowingly, recklessly, or negligently have obtained money or property by 

means of one or more untrue statements of a material fact or omissions of a material fact necessary 

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

not misleading, and/or (3) knowingly, recklessly, or negligently have engaged in one or more 

transactions, practices, or courses of business which operated or would operate as a fraud or deceit 

upon the purchaser. 

66. By reason of the foregoing, Defendant, directly or indirectly, singly or in concert, has 

violated and, unless enjoined, will again violate Securities Act Section 17(a) [15 U.S.C. § 77q(a)]. 

SECOND CLAIM FOR RELIEF 

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

67. The Commission re-alleges and incorporates by reference here the allegations in 

paragraphs 1 through 63. 

68. Defendants, directly or indirectly, singly or in concert, in connection with the 

purchase or sale of securities and by the use of means or instrumentalities of interstate commerce, or 

the mails, or the facilities of a national securities exchange, knowingly or recklessly have (i) employed 

one or more devices, schemes, or artifices to defraud, (ii) made one or more untrue statements of a 

material fact or omitted to state one or more material facts necessary in order to make the 

statements made, in light of the circumstances under which they were made, not misleading, and/or 

(iii) engaged in one or more acts, practices, or courses of business which operated or would operate 

as a fraud or deceit upon other persons. 

69. By reason of the foregoing, Defendants, directly or indirectly, singly or in concert, 

have violated and, unless enjoined, will again violate Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] 

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

  

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17 
 

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that the Court enter a Final 

Judgment: 

I. 

Permanently enjoining Lisser and his agents, servants, employees and attorneys and all 

persons in active concert or participation with him, from violating, directly or indirectly, Securities 

Act Section 17(a) [15 U.S.C. § 77q(a)] and Exchange Act Section 10(b) [15 U.S.C. § 78j(b)] and Rule 

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

II. 

 Ordering Lisser to disgorge all ill-gotten gains he received directly or indirectly, with pre-

judgment interest thereon, as a result of the alleged violations;  

III. 

Ordering Lisser to pay civil monetary penalties under Securities Act Section 20(d) [15 U.S.C. 

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

IV. 

 Granting any other and further relief this Court may deem just and proper. 

 
  

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18 
 

Dated:   December 1, 2020 
New York, New York 
 
 

      By:  /s/ Richard R. Best   
      RICHARD R. BEST 
      REGIONAL DIRECTOR 
      Sanjay Wadhwa 
      Michael Paley 
      Todd D. Brody 
      Tejal D. Shah 
      Hane L. Kim 
      SECURITIES AND EXCHANGE COMMISSION 
      New York Regional Office 
      Brookfield Place 
      200 Vesey Street, Suite 400 
      New York, New York 10281-1022  
      (212) 336-0080 (Brody) 
      [email protected] 
        

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