SEC v. Paul Marcus (Amerindo Investment Advisors)

22. SEC v. Paul Marcus (Amerindo Investment Advisors)

Citation: 2026 WL 100149 (2d Cir. Jan. 14, 2026), Nos. 17-2534, 17-2537, 17-2681, 24-2751

Relevant Facts

• A massive investment fraud scheme was perpetrated through multiple trusts and investment entities (including The Deane J. Marcus Trust, The Steven E. Marcus Trust, The Cheryl Marcus-Podhaizer Trust, and The Eve S. Marcus Children’s Trust).

• Defendants commingled ATGF (Amerindo Technology Growth Fund) and GFRDA (Guaranteed Fixed Rate Deposit Account) investor funds.

• ATGF investors expected higher returns with greater market risk; GFRDA investors expected guaranteed fixed-rate deposits with lower risk.

• Despite different investment profiles, funds were indiscriminately pooled and invested, resulting in significant investor losses.

• The district court issued receivership orders and four interim distribution orders totaling $13,849,639.27.

Legal Issues

Whether the district court had authority to distribute receivership assets and allocate surplus profits; whether the court improperly failed to differentiate between ATGF and GFRDA investors; and whether ATGF investors possessed constructive trust rights in surplus assets.

Positions of the Parties

Marcus: The district court improperly constrained its equitable authority and abused discretion by failing to differentiate between investor groups; ATGF investors should receive priority based on constructive trust theory.

Sec: The district court properly exercised broad equitable discretion; funds were commingled with no meaningful differentiation possible; pro rata distribution best served all defrauded victims equitably.

Decision of the Court

AFFIRMED.

Reasons for the Decision

• Once the district court found federal securities law violations, it possessed broad equitable power to fashion appropriate remedies.

• Promises made to investor groups were equally illusory due to false representations.

• Commingling of funds made traceability virtually impossible, undermining any priority claims.

• Pro rata distribution treated all fraud victims equitably in proportion to their investments.

• Recognizing a constructive trust would be inconsistent with fair distribution.