Riadh Fakhoury, the President and Founding Partner of Vestech Partners, LLC, a venture capital firm he founded in 2014 in Ocala, Florida that also operates through affiliated entities Marita Partners, LLC and MI 15 LLC, has agreed to pay $2,364,449.64 in disgorgement, prejudgment interest, and civil penalties to resolve Securities and Exchange Commission charges that he made materially false and misleading statements to investors in dozens of unregistered venture capital funds he managed between 2019 and mid-2023. Fakhoury, who also operates the Fakhoury Medical and Chiropractic Center and attended Southern California University of Health Sciences, pitched his funds as offering access to Silicon Valley tech startups through what he described as a well-connected and experienced VC platform with an 80% success record.
The SEC’s order, issued April 8, 2026, found that those representations were false across three categories: Fakhoury fabricated institutional co-investment claims, overstated the performance of portfolio companies, and failed to disclose conflicts of interest that affected investor decisions. The order also found that Fakhoury and his entities never registered the dozens of investment companies through which they raised money, and never filed required registration statements with the SEC. Fakhoury consented to a permanent associational bar, which prevents him from working in any capacity with registered investment advisers, broker-dealers, or other SEC-registered entities.
Fakhoury Told Investors Institutional Funds Had Co-Invested in the Same Tech Companies They Had Not
The most direct misrepresentation in the SEC’s findings involves fabricated third-party validation. To attract investors and convey legitimacy, Fakhoury and his entities assured current and prospective investors that established institutional investors had made co-investments in the same private technology companies held by Vestech’s funds. According to the SEC’s order, those co-investments had not occurred. Telling investors that major institutions have backed the same companies they are being solicited to invest in is a well-established sales technique in private markets, and the SEC found that Fakhoury used it without factual basis.
Private civil litigation filed against Fakhoury in the Eastern District of North Carolina tracks the same pattern. In that case, investors alleged that Fakhoury presented himself as an expert in private equity investing, claimed an 85% success rate, projected returns of 4 to 10 times conservatively, and made no disclosures of any risk for investments in KERV, DeNexus, Punja Global Fund, TrendiTech, Didja, AllSeated, and PointInside. The SEC’s administrative action confirms the broader pattern those investors described.
Vestech Overstated Performance and Hid Negative Information on at Least Three Portfolio Companies
Beyond the fabricated institutional co-investment claims, the SEC found that Fakhoury and his advisory entities misled investors by overstating investment performance and omitting negative information from statements they made about at least three technology companies held by their venture capital funds. The SEC’s order does not identify those companies by name, but Vestech’s disclosed portfolio includes early-stage investments in companies operating in software, digital media, and internet services, including Dataguise, DidjaTV, Point Inside, Grabit, OkUTECH, Dataweave, and Traveltriangle.
Omitting negative information about portfolio company performance is a material disclosure failure in the context of ongoing investor communications about fund assets. Investors in private VC funds have limited independent access to information about portfolio companies and depend on fund manager reporting to evaluate the health of their investments. The SEC found that Vestech’s reporting systematically presented a more favorable picture than the facts warranted.
Dozens of Unregistered Investment Companies Sold Interests Without Required Registration Filings
The SEC charged Fakhoury and his entities with failing to register the investment companies through which they raised money, a violation of Sections 9(b) and 9(f) of the Investment Company Act of 1940. The order describes dozens of unregistered investment companies for which Fakhoury never filed or caused to be filed any registration statement. Selling interests in unregistered investment companies to retail investors without the required disclosures removes a layer of investor protection that registration is designed to provide.
The charges also included violations of the Investment Advisers Act of 1940 for Fakhoury’s conduct as an unregistered or improperly operating investment adviser. The multi-statute nature of the charges — spanning the Securities Act, Exchange Act, Investment Advisers Act, and Investment Company Act — reflects the scope of the regulatory obligations Fakhoury bypassed across the four-year period of the scheme.
The $2.4M Penalty Covers Disgorgement and a $600K Fine Plus a Permanent Associational Bar
The SEC ordered Fakhoury and his entities to pay $1,443,749.28 in disgorgement, $320,700.36 in prejudgment interest, and a $600,000 civil penalty, totaling $2,364,449.64. The full amount has been collected and deposited in a Fair Fund at the U.S. Department of the Treasury under Section 308(a) of the Sarbanes-Oxley Act of 2002. The SEC has requested an extension until June 22, 2027 to submit a proposed distribution plan, citing the need to complete the fund administrator solicitation and appointment process and develop the distribution methodology. In addition to the financial penalties, Fakhoury agreed to a permanent associational bar, ending his ability to work in any registered capacity in the securities industry.
Conclusion
Fakhoury built Vestech Partners around a specific promise: that retail investors could get inside access to Silicon Valley technology deals alongside institutional co-investors, at low risk, through a manager with an 80%+ track record. The SEC’s findings document that each of those claims was either fabricated or materially misleading. The institutional co-investors did not exist. The performance record was overstated. Negative information about portfolio companies was withheld. The dozens of investment companies through which the money was raised were never registered. The $2.4M penalty and the permanent associational bar are the SEC’s conclusion to a VC pitch that was, at its core, a fiction.
