The Securities and Exchange Commission (SEC) has filed suit against now-defunct Diamond Desk Corporation and its owner, Adam J. Lowe, charging they misled investors about their plan to sell fancy colored diamonds.
In a complaint filed Sept. 25 in Southern District of Florida court, the SEC alleged that Lowe, owner of Coral Gables–based trading company Diamond Desk, raised $2.2 million from nine investors, telling them he’d use that money to acquire parcels of natural fancy colored diamonds, which he’d then sell to high-end retailers for a profit. Investors were promised returns of up to 27%, plus the full return of their principal within a year, according to SEC.
But regulators claimed that while Lowe did buy and sell some diamonds, he misappropriated nearly half of the investors’ funds—taking almost $924,000 for personal expenses, with over $200,000 spent at casinos.
“Lowe did not disclose to investors that he was using investor funds for non-business purposes, for gambling or other personal benefit,” the SEC said, adding that in the end Lowe returned only $80,000 to investors.
The SEC seeks injunctive relief, civil penalties, and a ban on Lowe serving as an officer and director of any company whose securities are registered with the SEC.
No attorney was listed for Lowe in the SEC lawsuit, and he could not be reached for comment by press time.
Top: SEC headquarters in Washington, D.C. (photo courtesy of iStock/traveler1116)
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