SEC Charges Ex-Hilltop and Merrill Lynch Rep With Defrauding Customers
The U.S. Securities and Exchange Commission filed settled charges against Rajesh Markan, formerly a registered representative and investment adviser representative employed by two securities brokerage firms, for soliciting his brokerage customers to invest in a fake private equity fund.
According to the SEC’s complaint, from at least 2015 through July 2024, Markan, while working as a registered representative of two dually-registered broker-dealers and investment advisers – Hilltop Securities from 2022 to 2024; and Merrill Lynch, Pierce, Fenner & Smith Incorporated from 2009 to 2022 – solicited approximately 10 of his brokerage customers to invest, collectively, approximately $2.9 million in a purported private equity fund.
The SEC alleges that Markan told the investors that a well-known New York private equity firm advised the fund, which Markan called “Intrinsic Value Portfolio.” The complaint alleges that because Markan claimed it was a private equity investment, Markan told investors that their money would be tied up for six to 12 years, but he assured them that, ultimately, they could expect to make above-market returns.
According to the SEC’s complaint, none of these representations were true: the fund was fake and never existed, there was no association with the New York private equity firm, and Markan misappropriated most of the investors’ money for himself. The SEC also alleges that Markan lulled investors by sending fabricated statements purporting to show their account balances, and Markan created a fake domain name so he could send emails as a purported employee of the New York private equity firm.
In a parallel action, the U.S. Attorney’s Office for the Northern District of Texas filed criminal charges against Markan in U.S. District Court for the Northern District of Texas, to which he pled guilty on June 10, 2025. Additionally, on Oct. 1, 2024, the Financial Industry Regulatory Authority barred Markan from associating with any FINRA member.
Markan’s registration history also includes time at Citigroup Global Markets from 2006 to 2009 and Ameriprise Financial Services from 2002 to 2006.
The SEC’s complaint, filed in U.S. District Court for the Northern District of Texas (Dallas Division), charges Markan with violating the antifraud provisions of the federal securities laws.
Without admitting or denying the allegations in the complaint, Markan agreed to a bifurcated settlement and consented to the entry of a judgment permanently enjoining him from future violations of the antifraud provisions and ordering that monetary remedies – disgorgement, prejudgment interest, and a civil penalty – will be determined by the court upon a future motion by the SEC. The settlement is subject to court approval.
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