On June 5, 2026, the SEC charged an investment adviser and related entities with a multi-year fraud involving a pooled investment fund that raised about $4 million from 28 investors. The SEC alleged the defendant misappropriated and commingled funds, concealed losses exceeding $3.6 million, and diverted assets for personal use.

Affinity fraud is a form of financial fraud that relies on social connections and trust. It most often occurs within identifiable groups, such as religious, cultural, or ethnic communities, or social organizations, where members share common values, experiences, or identities. Rather than approaching targets as strangers, those promoting the scheme position themselves as insiders, using familiarity and perceived credibility to create comfort and reduce skepticism.