In a litigated case, the SEC charged Ryan Wear and his entities, Water Station Management LLC and Creative Technologies, Inc., for operating two related Ponzi-like schemes between September 2016 and February 2024 that raised more than $275 million from more than 250 investors. In one scheme, defendants allegedly sold investment contracts in which investors supposedly purchased water machines, thousands of which did not exist or had already been sold to other investors. The defendants further misappropriated over $60 million of investor funds to make payments to other investors and to fund Wear's other business ventures. In a related scheme, the defendants issued notes secured by water machines, most of which did not exist or were not owned by Water Station. In a separate action, the SEC also charged portfolio manager Jordan Chirico for violating his fiduciary duty by directing his private fund client to purchase Water Station notes without disclosing his significant personal investment in the business and despite his awareness of red flags. The SEC alleged that Chirico failed to act in the fund’s best interests by causing it to substantially increase its investments in the notes despite red flags that some of the purported water machine collateral may have been fabricated. The U.S. Attorney's Office for the Southern District of New York announced criminal charges against Wear and Chirico.