CEO of La Jolla financial services firm pleads guilty to securities fraud
The chief executive of a La Jolla-based financial services firm pleaded guilty Oct. 7 to defrauding shareholders, falsifying tax returns and operating an unlicensed money services business.
David Nava, head of Surf Financial Group LLC, worked with others to convert publicly traded companies’ debt into unrestricted stock under false pretenses and then sold the stock, despite being banned since 1994 by federal
securities regulators from taking part in the securities industry, according to federal prosecutors.
Prosecutors said Nava, 62, directed others to write fraudulent attorney opinion letters that facilitated removing restrictions on stocks so they could be sold, in circumvention of the U.S. Securities and Exchange Commission’s regulations on the offer and sale of securities.
The Department of Justice said brokerage firms cleared the sale of shares of the restricted stocks on the basis of those letters, enabling Nava and others to sell millions of shares, then move the proceeds into bank accounts under his control.
In addition to his plea to a federal count of conspiracy to commit securities fraud, Nava pleaded guilty to operating an unlicensed money transmitting business, which he used to move millions of dollars in financial proceeds, and a count of tax fraud for falsifying federal tax returns from 2014 to 2016 in which he underreported Surf Financial’s profits to conceal
his true income and tax liability, according to the Department of Justice.
Sentencing is slated for Jan. 8 in federal court in San Diego. ◆
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