Key Takeaways
- • Rajesh Markan, a 48-year-old broker with 24 years in the securities industry, orchestrated a $2.3 million fraud by fabricating a fake Bain Capital private equity fund called the Intrinsic Value Portfolio between 2015 and July 2024.
- • Markan solicited approximately 10 clients to invest a combined $2.9 million in the nonexistent fund, forging documents, fabricating client statements, and registering a fake domain to impersonate a Bain Capital employee.
- • On June 1, 2026, a federal court entered final judgment ordering disgorgement of $2,305,025 plus prejudgment interest, satisfied by a $2.45 million criminal restitution order issued at Markan's January 2026 sentencing.
- • Markan pleaded guilty to one count of securities fraud on March 31, 2025, and received a two-year federal prison sentence with a $2.5 million restitution mandate to victims.
- • The fraud occurred while Markan held registered broker and investment adviser representative licenses at Merrill Lynch (2009–2022) and Hilltop Securities (October 2022–August 2024), raising compliance oversight questions at both institutions.
Summary
Rajesh Markan, a 48-year-old resident of Flower Mound, Texas, perpetrated a multi-year securities fraud scheme targeting approximately 10 brokerage clients by fabricating a private equity fund falsely attributed to Bain Capital. Beginning no later than 2015 and continuing through July 2024, Markan solicited clients to invest a combined $2.9 million in what he called the Intrinsic Value Portfolio, claiming it was advised by Bain Capital, one of the nation's most prominent private equity firms. The fund did not exist, and Bain Capital had no involvement whatsoever in the scheme.
To sustain the fraud, Markan engaged in an extensive pattern of document forgery and impersonation. He forged Bain Capital documents, fabricated client investment statements designed to show fictitious portfolio growth, registered a fake internet domain to impersonate a Bain Capital employee, distributed a fraudulent prospectus, and created annual performance reports intended to convince clients their capital was legitimately invested and appreciating. These tactics are characteristic of affinity fraud schemes that exploit client trust and institutional brand recognition to mask illicit activity.
Markan's professional history reveals significant regulatory gaps. He entered the securities industry in 2002 and built a substantial client base as a registered broker and investment adviser representative. He worked at Merrill Lynch from 2009 to 2022, where he voluntarily resigned after the firm flagged his failure to disclose a client loan—a disclosure that appeared on his BrokerCheck record. Notably, Markan faced no formal discipline at Merrill Lynch because the fraudulent fund's existence was not yet discovered at that time. He subsequently joined Hilltop Securities in October 2022 and remained there until August 2024, continuing the fraud throughout his tenure.
On March 31, 2025, Markan pleaded guilty to one count of securities fraud. He was sentenced to two years in federal prison in January 2026 with a restitution order of $2.5 million to victims. On June 1, 2026, a federal court entered final judgment in the SEC's civil action, ordering disgorgement of $2,305,025 plus prejudgment interest, which was deemed satisfied by the criminal restitution order. The case underscores ongoing compliance and due diligence challenges in broker oversight and the vulnerability of retail clients to fraud schemes leveraging the credibility of established financial institutions.
To sustain the fraud, Markan engaged in an extensive pattern of document forgery and impersonation. He forged Bain Capital documents, fabricated client investment statements designed to show fictitious portfolio growth, registered a fake internet domain to impersonate a Bain Capital employee, distributed a fraudulent prospectus, and created annual performance reports intended to convince clients their capital was legitimately invested and appreciating. These tactics are characteristic of affinity fraud schemes that exploit client trust and institutional brand recognition to mask illicit activity.
Markan's professional history reveals significant regulatory gaps. He entered the securities industry in 2002 and built a substantial client base as a registered broker and investment adviser representative. He worked at Merrill Lynch from 2009 to 2022, where he voluntarily resigned after the firm flagged his failure to disclose a client loan—a disclosure that appeared on his BrokerCheck record. Notably, Markan faced no formal discipline at Merrill Lynch because the fraudulent fund's existence was not yet discovered at that time. He subsequently joined Hilltop Securities in October 2022 and remained there until August 2024, continuing the fraud throughout his tenure.
On March 31, 2025, Markan pleaded guilty to one count of securities fraud. He was sentenced to two years in federal prison in January 2026 with a restitution order of $2.5 million to victims. On June 1, 2026, a federal court entered final judgment in the SEC's civil action, ordering disgorgement of $2,305,025 plus prejudgment interest, which was deemed satisfied by the criminal restitution order. The case underscores ongoing compliance and due diligence challenges in broker oversight and the vulnerability of retail clients to fraud schemes leveraging the credibility of established financial institutions.
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