Jan. 8, the U.S. Securities and Exchange Commission (SEC) filed a civil law suit against popular Iranian Jewish radio talk show host and financial adviser John Farahi. The suit alleges Farahi and his Beverly Hills firm, NewPoint Financial Services Inc., defrauded Iranian American investors of millions of dollars and that Farahi, his company, his wife Gissou and the firm’s controller, Elaheh Amouei, misled investors by falsely telling them their funds were being invested in low-risk unsecured corporate bonds, FDIC insured certificates of deposit, government bonds and corporate bonds issued by companies backed by funds from the Troubled Asset Relief Program (TARP). In reality, the complaint alleges, the investors’ money was transferred into personal accounts controlled by Farahi and his wife to fund construction of their multimillion-dollar mansion in Beverly Hills and in risky option futures trading in the stock market that resulted in more than $18 million in losses for investors.
The SEC’s suit also claims that since 2003, Farahi used his radio program, “The Economy Today,” featured on the Studio City-based Farsi-language radio station Radio Iran KIRN 670 AM to target members of L.A.’s Iranian American community, recommending they make appointments at his firm. “They lured victims with false promises of investment safety while secretly enriching themselves and diverting investor funds for their personal use,” Rosalind R. Tyson, director of the SEC’s Los Angeles Regional office, said in a statement.
In conjunction with the suit, the SEC has obtained an order temporarily freezing the Farahis’ and NewPoint’s assets until the government can investigate the case further. A hearing on the Farahis case is scheduled for Jan. 15 in U.S. Federal court in downtown Los Angeles.
Farahi’s attorney, Gary Lincenberg, did not return calls for comment.