SEC Obtains Judgment Against Donato Baca, Jr. in Ponzi Scheme

February 11, 2019/US SEC

On February 8, 2019, the Securities and Exchange Commission obtained a judgment against Donato Baca, Jr. for his role in a multimillion dollar Ponzi scheme.

On September 27, 2018, the SEC charged Baca, his business partner, Jonny Ngo, and NL Technology, LLC with lying to investors. According to the SEC’s complaint, NL Technology, Ngo, and Baca raised more than $61 million from over 350 investors by falsely promising that the money would be used to fund NL Technology’s wholesale technology import business. The complaint alleged that Ngo and Baca used the money raised to pay prior investors and for lavish personal expenses. On September 28, 2018, the court entered final judgments against Ngo and NL Technology.

Without admitting or denying the allegations in the complaint, Baca consented to the entry of a judgment permanently enjoining him from violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, and prohibiting him from soliciting, accepting, or depositing any moneys from actual or prospective investors in connection with any offering of securities. The judgment also orders Baca to pay disgorgement of $4.7 million plus $256,647 in prejudgment interest, and a civil penalty of $960,000.

The SEC’s investigation was conducted by Patricia Pei and supervised by Ansu N. Banerjee. The SEC’s litigation was led by Lynn Dean.

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