The Securities and Exchange Commission (SEC) has taken action against 29-year old Solomon Lichtenstein, accusing him of orchestrating a fraudulent investment scheme by misrepresenting how he would use investors’ funds, by falsely reporting their investment returns, and by misappropriating their investments for personal purposes.

The SEC’s complaint was submitted at the New York Southern District Court on October 22, 2025.

The complaint alleges that, from approximately July 2022 through August 2024 (the “Relevant Period”), Lichtenstein raised at least $2.7 million from over 25 investors – many of whom were Lichtenstein’s family members, neighbors, and friends – through two entities: Taraxa Capital Fund, LP (“Taraxa” or the “Fund”), a pooled investment vehicle, and Lightstone Trading Inc.

Lichtenstein, as investment adviser to the Fund, held out Taraxa as a hedge fund that invested in securities using a day-trading strategy that he claimed he had profited from personally.

Similarly, Lichtenstein represented that money from Lightstone investors would be invested using the same trading strategy; however, instead of being subject to market risk, Lightstone investors were to receive a fixed interest payment of 5% per month, which was intended to be generated from Lichtenstein’s trading returns.

The SEC’s complaint further alleges that rather than invest all of the money he raised from Taraxa and Lightstone investors as promised, Lichtenstein misappropriated investor funds to pay for personal expenses, as well as to make Ponzi-like payments to satisfy redemption requests and interest obligations owed to other investors.

Lichtenstein spent hundreds of thousands of dollars of investor funds on credit card payments, mortgage payments, bars, restaurants, travel, and cash withdrawals. To pay these personal expenses, Lichtenstein misappropriated approximately $868,000 from Taraxa and approximately $98,000 from Lightstone.

As a result of Lichtenstein’s having invested a portion of investors’ money as promised, the overall rate of return on the trading was negative. In total, Lichtenstein’s trades on behalf of Taraxa and Lightstone investors resulted in net losses of approximately $200,000.

Rather than disclosing these losses to investors, Lichtenstein fabricated positive returns through online dashboards for Taraxa investors that falsely reported significant growth in the value of their investments.

In and around the summer of 2024, Lichtenstein’s scheme collapsed when he ran out of investor money and admitted to several investors that he had used investor funds to pay his personal

expenses. As a result of Lichtenstein’s scheme, investors lost in the aggregate more than $1.5 million.

The SEC accuses the defendant of violations of Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)], Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5], and Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 (“Advisers Act”) [15 U.S.C. §§ 80b-6(1), 80b-6(2), 80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8].

The regulator seeks a final judgment:

• permanently enjoining Lichtenstein from engaging in the acts, practices, and courses of business alleged against him herein and from violating the federal securities laws and rules this Complaint alleges he has violated;
• permanently enjoining Lichtenstein from directly or indirectly, including but not limited to, through any entity owned or controlled by him, participating in the issuance, purchase, offer, or sale of any security; provided, however, that such injunction shall not prevent him from purchasing or selling securities for his own personal accounts;
• permanently restraining and enjoining Lichtenstein from directly or indirectly, acting as or being associated with any investment adviser;
• ordering Lichtenstein to disgorge all ill-gotten gains he received as a result of the violations alleged herein and to pay prejudgment interest thereon pursuant to Exchange Act Sections 21(d)(3), 21(d)(5) and 21(d)(7) [15 U.S.C. §§ 78u(d)(3), 78u(d)(5) & 78u(d)(7)];
• ordering Lichtenstein to pay civil money penalties pursuant to Securities Act Section 20(d) [15 U.S.C. § 77t(d)], Exchange Act Section 21(d)(3) [15 U.S.C. § 78u(d)(3)], and Advisers Act Section 209(e) [15 U.S.C. § 80b-9(e)]; and
• ordering any other and further relief the Court may deem just and proper.