The Securities and Exchange Commission (SEC) has filed a lawsuit against Krish Kumar, manager of Future Fractal Investments LLC and Arcane Resonance Fund, LLC, alleging that he raised approximately $7.8 million from investors based on materially false and misleading representations and misappropriated nearly $7 million of investor funds.
The SEC's complaint was submitted in the Oklahoma Northern District Court on March 26, 2026. According to the filing, from approximately January 2024 through February 2025, Kumar, a college student from Tulsa, Oklahoma, offered and sold membership interests in Future Fractal and Arcane to approximately two dozen investors. Nearly all investor funds were sent to bank and brokerage accounts in the name of Future Fractal.
Alleged Misrepresentations and Trading Activity
The SEC alleges that Kumar held himself out as an investment adviser and made numerous materially false and misleading representations about Future Fractal's investment strategy in offering materials and in-person meetings. He allegedly told investors he would use a proprietary algorithmic options trading strategy.
Contrary to these representations, the complaint states that starting on Future Fractal's second day of active trading on or about January 30, 2024, Kumar began making increasingly risky trades that were inconsistent with the marketed strategy. By the end of February 2024, Future Fractal had lost approximately $470,000 by trading outside of its stated investment approach.
Misappropriation of Funds and Losses
Beginning in late February 2024, Kumar allegedly transferred more than $5.6 million of Future Fractal's funds to personal accounts he controlled. Over four trading days in mid-March 2024, he is accused of losing approximately 98% of Future Fractal's assets by executing trades outside the represented strategy, including investing the vast majority of the funds in a publicly traded crypto-asset technology company focused on Bitcoin mining.
The SEC further alleges that, while acting as an investment adviser, Kumar misappropriated nearly $7 million of the collective assets of Future Fractal and Arcane by transferring investor funds to accounts under his control.
Arcane Resonance Fund and Use of Proceeds
According to the complaint, beginning in May 2024, Kumar solicited new investors for a second fund, Arcane Resonance Fund, LLC, raising approximately $1.8 million from 10 investors. At least $300,000 of these funds were allegedly used to make unauthorized payments to a Future Fractal investor to cover losses previously sustained in Future Fractal.
Regulatory Claims and Requested Relief
The SEC accuses Kumar of violating the antifraud provisions of the federal securities laws and the Investment Advisers Act of 1940. The Commission is seeking injunctive relief, disgorgement of ill-gotten gains, pre-judgment interest, a civil penalty, and all other equitable and ancillary relief deemed appropriate by the court.
