Hawaii businessman David Low was arrested Tuesday on a $110,000 bench warrant, according to the Department of Commerce and Consumer Affairs.
Low was charged with five felony counts of theft. He is scheduled to be arraigned on Monday.
A cease-and-desist order was given to Low and his company, Hawaii Capital Management, LLC, for violating state securities laws.
Low has promoted himself as an investment expert and as "Hawaii's Fittest CEO" on his company website, among other places.
The order alleges that between February 2010 and April 2012, Low solicited three investors to purchase securities in the form of investment contracts from Hawaii Capital Management, LLC. Low allegedly told the investors that their money would be invested in an annuity, Roth IRA, or "pooled" investment for their future use and benefit. As a result, the investors furnished a combined total of $257,626.18 to Low and his company.
However, the investors' money was not invested as promised. Instead, Low used the money to purchase securities for himself and for personal expenses, including payments to Mercedes Benz, Audi Hawaii, and the City & County of Honolulu for registration of a Ferrari, according to the State Securities Enforcement Branch.
The order also asserts that Low and Hawaii Capital Management, LLC employed deceptive schemes and devices to conceal the fraud such as forging documents, using one investor’s money to pay a return to another investor, and issuing false financial statements of fictitious accounts and account balances.
State securities laws provide anti-fraud provisions and also require securities such as investment contracts, as well as individuals or entities soliciting or transacting securities, to be registered with the state. The order alleges that Low was not registered to transact securities in Hawaii, that the securities he sold to the three investors were also unregistered, and that respondents violated the state's anti-fraud provisions.
The order seeks total penalties of $200,000 in addition to a permanent injunction against transacting securities in the state, rescission, and restitution for the investors.
Anyone who has been solicited by or transacted business with David T. Low and/or Hawaii Capital Management, LLC or who may have information regarding this matter is urged to contact the State Securities Enforcement Branch.
Securities Enforcement Branch
Oahu (808) 586-2740
Kauai: (808) 274-3141, followed by 62740 and the # sign
Maui: (808) 984-2400, followed by 62740 and the # sign
Hawaii: (808) 974-4000, followed by 62740 and the # sign
Lanai and Molokai: 1-800-468-4644 (toll free), followed by 62740 and the # sign