SEC Charges Dinelli and Frankel in $8.7 Million Veteran-Targeted Fraud
SEC alleges Dinelli and Frankel raised over $8.7 million from 35 investors, diverted pre-IPO money into losing options trades, and took over $1.34 million.
Summary
On September 29, 2026, the SEC filed Securities and Exchange Commission v. Christopher Kenji Dinelli, et al., No. 26-cv-8564, in the Southern District of New York. Litigation Release No. 26658, issued September 30, alleges Christopher Kenji Dinelli, also known as Kenji Dinelli, and Jacob David Frankel, identified as Kobi in the title and Kobe in the release, raised more than $8.7 million from 35 investors through the Beyond Alpha Ventures LLC fund, or BAV, and adviser Beyond Equity LLC. Dinelli, a former naval officer, allegedly targeted veterans, medical providers serving veterans and others, claiming money would fund an options strategy or affiliated special purpose vehicles holding pre-IPO securities in two private companies. The defendants allegedly misstated performance, assets under management, clients and holdings while promoting returns up to 153% despite consistent losses, including a “153% Net Return on Investment” claim in “Trading Fund Overview 2024.”
The SEC alleges pre-IPO money was secretly diverted to BAV brokerage accounts, where failed options trades lost the vast majority, while Dinelli misappropriated over $1 million and Frankel over $340,000. Both face Securities Act of 1933 and Exchange Act of 1934 antifraud charges, with Frankel also charged under the Investment Advisers Act of 1940. The SEC seeks permanent injunctions, disgorgement with prejudgment interest and civil penalties; federal prosecutors filed parallel criminal charges. William Conway, Douglas Smith and Sandeep Satwalekar investigated under Thomas P. Smith Jr.; Chevon Walker and Conway handle the litigation, with assistance from the U.S. Attorney’s Office and U.S. Postal Inspection Service.
Positives
- The SEC seeks permanent injunctions, disgorgement with prejudgment interest and civil penalties against both defendants.
- The U.S. Attorney’s Office for the Southern District of New York filed parallel criminal charges concerning the same alleged conduct.
- The SEC coordinated with federal prosecutors and the U.S. Postal Inspection Service during the investigation.
Risks & concerns
- More than $8.7 million was allegedly raised from 35 investors through Beyond Alpha Ventures and Beyond Equity.
- Returns of up to 153% were allegedly promoted despite consistent fund losses.
- The vast majority of diverted pre-IPO money was allegedly lost through failed options trades.
- Dinelli allegedly misappropriated over $1 million, while Frankel allegedly misappropriated over $340,000.
- Dinelli allegedly used his former naval officer status while targeting veterans and medical providers serving veterans.
