The US Department of Justice said a Florida investment advisor has pleaded guilty to carrying out a $9 million investment fraud scheme.

A Tampa, FL, area investment advisor yesterday pleaded guilty to perpetrating a $9 million investment fraud scheme involving Facebook stock.

Gignesh Movalia, 40, of Tampa, pleaded guilty before US magistrate judge Anthony Porcelli of the middle district of Florida to one count of investment advisor fraud.

Movalia was the founder and manager of OM Global Investment Fund, an investment fund formed in 2009. According to admissions made in connection with his guilty plea, beginning in or about 2011, Movalia began soliciting investments for the OM Global Fund by, among other methods, touting access to pre-initial public offering shares of Facebook. 

He admitted that, by the end of 2012, he had raised more than $15 million for the OM Global Fund, and that more than $9 million of the amount raised was for “side pocket” investments, which he claimed would be used exclusively for buying Facebook shares.

“Movalia further admitted that, contrary to these representations and unknown to “side pocket” investors, he used funds designated exclusively for the purchase of Facebook shares for other investments, which he concealed from the investors,” the DoJ said. “He also admitted that he made material misrepresentations and omissions to investors in order to mislead them about the nature and value of their investments in the OM Global Fund.”

The OM Global Fund lost around $9 million before it went into receivership in September 2013, the DoJ said.

Sentencing will be scheduled at a later date.