SEC v. Gauntlet Holdings, LLC; Darrell W. Rideaux; Ali Derakhshanfar; and Sal N. Ortiz, No. LR-26266, Central District of California (Mar. 13, 2025) — Press Release

Litigation Release No. 26266 / March 13, 2025 Securities and Exchange Commission v. Gauntlet Holdings, LLC, et al., No. 25-cv-00492 (C.D. Cal., filed Mar. 13, 2025) SEC Charges California-Based Company and Two Individuals with Offering Fraud The Securities and Exchange Commission announced today that it filed charges against California-based Gauntlet Holdings, LLC, Gauntlet’s managing member Darrell W. Rideaux, and Ali Derakhshanfar for allegedly engaging in offering fraud. Sal N. Ortiz was charged as a relief defendant. The SEC’s complaint alleges two fraudulent schemes. In the first scheme, the SEC alleges that Gauntlet, Rideaux, and Derakhshanfar engaged in a scheme to sell to a company promissory notes purportedly backed by $7.98 billion held at a bank in Doha by the royal family of Qatar. The company, which was publicly traded at the time, allegedly paid $1 million to Gauntlet, Rideaux, and Derakhshanfar, representing an advance on profits the company anticipated making on transactions involving the promissory notes. However, according to the complaint, the funds backing the promissory notes did not exist. Rideaux and Derakhshanfar, the complaint alleges, engaged in an elaborate scheme to deceive the company into believing that Derakhshanfar had access to billions of dollars held by a sheikh connected to the Qatari royal family, including using a fake email address purportedly belonging to the sheik and fictitious bank records. Ortiz is alleged to have received a portion of the $1 million the company paid. In the second scheme, the complaint alleges that Gauntlet and Rideaux defrauded an individual investor out of $1 million with an investment scheme that promised high returns, but that ultimately failed to pay the victim any profit or provide the victim with a return of the money he invested. As alleged, Rideaux made various misrepresentations to the investor, including sending him a misleading video that he represented showed Gauntlet’s online bank account but, in fact, the account shown in the video did not belong to Gauntlet. Filed in federal court in Los Angeles, California, the SEC’s complaint asserts charges concerning both schemes. With respect to the first scheme, the SEC’s complaint charges Gauntlet, Rideaux, and Derakhshanfar with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and charges Ortiz as a relief defendant. With respect to the second scheme, the SEC’s complaint charges Gauntlet and Rideaux with violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The SEC seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against Gauntlet, Rideaux, and Derakhshanfar. The SEC seeks disgorgement plus prejudgment interest from relief defendant Ortiz based on his alleged receipt of proceeds of the first scheme to which he had no legitimate claim. The SEC’s case is being handled by Jonathan T. Menitove, Rua M. Kelly, Colin D. Forbes, Patrick J. Noone, and Celia D. Moore of the SEC’s Boston Regional Office.

Litigation Release No. 26266 / March 13, 2025 Securities and Exchange Commission v. Gauntlet Holdings, LLC, et al., No. 25-cv-00492 (C.D. Cal., filed Mar. 13, 2025) SEC Charges California-Based Company and Two Individuals with Offering Fraud The Securities and Exchange Commission announced today that it filed charges against California-based Gauntlet Holdings, LLC, Gauntlet’s managing member Darrell W. Rideaux, and Ali Derakhshanfar for allegedly engaging in offering fraud. Sal N. Ortiz was charged as a relief defendant. The SEC’s complaint alleges two fraudulent schemes. In the first scheme, the SEC alleges that Gauntlet, Rideaux, and Derakhshanfar engaged in a scheme to sell to a company promissory notes purportedly backed by $7.98 billion held at a bank in Doha by the royal family of Qatar. The company, which was publicly traded at the time, allegedly paid $1 million to Gauntlet, Rideaux, and Derakhshanfar, representing an advance on profits the company anticipated making on transactions involving the promissory notes. However, according to the complaint, the funds backing the promissory notes did not exist. Rideaux and Derakhshanfar, the complaint alleges, engaged in an elaborate scheme to deceive the company into believing that Derakhshanfar had access to billions of dollars held by a sheikh connected to the Qatari royal family, including using a fake email address purportedly belonging to the sheik and fictitious bank records. Ortiz is alleged to have received a portion of the $1 million the company paid. In the second scheme, the complaint alleges that Gauntlet and Rideaux defrauded an individual investor out of $1 million with an investment scheme that promised high returns, but that ultimately failed to pay the victim any profit or provide the victim with a return of the money he invested. As alleged, Rideaux made various misrepresentations to the investor, including sending him a misleading video that he represented showed Gauntlet’s online bank account but, in fact, the account shown in the video did not belong to Gauntlet. Filed in federal court in Los Angeles, California, the SEC’s complaint asserts charges concerning both schemes. With respect to the first scheme, the SEC’s complaint charges Gauntlet, Rideaux, and Derakhshanfar with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and charges Ortiz as a relief defendant. With respect to the second scheme, the SEC’s complaint charges Gauntlet and Rideaux with violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The SEC seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against Gauntlet, Rideaux, and Derakhshanfar. The SEC seeks disgorgement plus prejudgment interest from relief defendant Ortiz based on his alleged receipt of proceeds of the first scheme to which he had no legitimate claim. The SEC’s case is being handled by Jonathan T. Menitove, Rua M. Kelly, Colin D. Forbes, Patrick J. Noone, and Celia D. Moore of the SEC’s Boston Regional Office.