The Securities and Exchange Commission (SEC) has launched a lawsuit in the Minnesota District Court seeking to recover funds invested by the victims of a fraudulent day-trading scheme.

The SEC complaint alleges that, in 2019, Richard Myre, Dale Dahmen, and Dominick Dahmen founded Spartan Trading Company, LLC. Spartan Trading operated as an unregistered investment fund in which the Fund’s three promoters pooled money from investors, purportedly for day trading activities in stocks.

The Dahmens told investors that Myre would be responsible for the trading, which would purportedly generate profits for investors. Myre controlled the bank account into which investors deposited their funds and Myre signed all checks written on the account.

From 2019 to 2023, Spartan Trading raised over $3.7 million from dozens of investors in small communities such as Pierz and Belle Plaine, Minnesota and other communities surrounding the Twin Cities. Investors included Myre’s and the Dahmens’ prior business contacts and friends.

The Fund was a sham that defrauded investors in multiple ways. For instance, Spartan Trading, Myre, and the Dahmens raised money on the premise of pooled investing but then failed to make the promised investments in stocks. Instead, for long periods, funds sat idle in Spartan Trading accounts and were slowly eaten away as Myre withdrew money for himself, the Dahmens, and investors in an attempt to keep the scheme going.

The Fund’s written agreements with investors permitted Spartan Trading to receive, at most, half of all profits generated by Fund’s investments. But the Fund engaged in very little investment activity and accordingly generated few profits.

Nevertheless, Myre and the Dahmens regularly withdrew money from the Fund. Overall, during the life of the Fund, Myre and the Dahmens received over $1.9 million of investor money. Of that, Myre received over $1.1 million, while Dale Dahmen received approximately $649,000 and Dominick received $173,113.

On February 1, 2023, Myre and the Dahmens were found dead in what police reported as a murder suicide.

The aftermath of the deaths has caused significant upheaval for investors, the SEC notes. This lawsuit seeks to freeze what remains in Spartan Trading’s accounts and to conduct expedited discovery to determine where the investor funds went and what can be recovered for defrauded investors.