The SEC entered final judgment in a December 2025 case against Yida Gao & Shima Capital Management, LLC. The Shima Capital Fund pitch deck contained material misrepresentations regarding Gao’s track record investing in crypto assets, highlighting five “fund-returning” investments with returns Gao purportedly earned prior to forming the fund. Highlighted returns were all inaccurate, two understated and three materially overstated, with represented returns of 85x, 65x and 90x while actual returns were 31x, 8.5x, and 2.8x, respectively. When a Financial Times article noted the discrepancy in the pitch deck, Gao subsequently called investors with false information about the misstated returns. Further raised BitClout SPV for a different crypto-focused venture where Gao asserted that he could obtain a 20-40% discount due to his unique access to early investors from whom he would purchase BitClout tokens. However, Gao sold the tokens purchased at a discount to the fund at a significant premium. Geo was ordered to pay more than $4 million in disgorgement and penalties. The U.S. Attorney’s Office brought a parallel criminal action against Gao. Funds that are marketed based on the prior track record of personal investors are particularly susceptible to misleading statements, as unregistered family offices and other investors are not held to the same standards when calculating and reporting performance. These risks are enhanced for unscrupulous parties. Compliance staff should ensure that they can substantiate all track records claimed and that disclosures regarding pre-fund returns contain robust disclosures to ensure they are not misleading.