SEC v. John Robert Jones, Jr.

Civil Action No. 3:21-cv-98-TCB

On June 28, 2021, the SEC filed a Complaint against John Robert Jones, Jr. (“Jones”) (the “Defendant”). From October 2017 through approximately December 2018 (“Relevant Period”), Jones fraudulently induced at least 24 investors to invest at least $5.1 million in two private unregistered private funds, falsely promising growth, and safety with limited risk.

Jones, founded and controlled two private funds -- PED Index Fund, L.P. (“PED”) and PED Index Fund A1, L.P. (“PED A1”) (collectively the “PED Funds”) that were Delaware limited partnerships formed in December 2016 and August 2017, respectively. Jones misrepresented to potential investors in the PED Funds, among other things, that investor funds were protected such that investors could only lose 10-15% of their principal investment, that investors’ principal was insured, and that his investment strategy was created in concert with a national financial organization. None of these things were true. As a result, he gave investors the false impression that the investment opportunities that he offered would be lucrative and have the protection of quantifiable downside risk. Jones’ scheme collapsed in December 2018. Jones ‘trading strategy that month -- he increased the PED Funds’ exposure to S&P call options -- combined with a downturn in the stock market caused huge losses for the PED Funds, and therefore the investors. Instead of limiting investor’s principal risk, Jones exposed investors to losses between 48% and 66% (an average of 57% loss). He closed the PED Funds late that month. See Complaints.

On July 7, 2022, the Court ordered that Jones was liable for disgorgement of $80,646.30, representing net profits gained as a result of the conduct alleged in the complaints, together with prejudgment interest thereon in the amount of $10,206.84; and a civil penalty in the amount of $195,047.00 pursuant to Sections 20(d) of the Securities Act of 1933 ("Securities Act") and Section 21(d)(3) of the Securities Exchange Act of 1934 ("Exchange Act"). See Final Judgment.

On June 4, 2024, the Court established a Fair Fund pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002 as amended so the penalty paid, along with the disgorgement and prejudgment interest can be distributed to investors harmed by the Defendant conduct described in the complaint. The court also appointed Miller Kaplan Arase LLP (“Miller Kaplan”), a certified public accounting firm with an office in San Francisco, CA as Tax Administrator (“Tax Administrator”) of the Fair Fund to execute all income tax reporting requirements of the Fair Fund. See Court Order.

For more information, please contact the Commission:

Office of Distributions
Email: ENFOfficeofDistributions@sec.gov