Proof of Securities Fraud Delivered to the SEC

Original Complaint: https://thinkingwithzach.blogspot.com/2025/01/submission-of-evidence-of-fraud-to.html 

3 days after i sent this complaint to both the SEC and the Federal Reserve, I read this headline:

SEC's Republican-led commission tightens oversight of probes, sources say

“In recent days, some enforcement staff have been told that they will need to seek the Commission's approval for all formal orders of investigation, which are required to issue subpoenas for testimony or documents, the sources said.”

Chairman and Commissioners of the Securities and Exchange Commission,

The integrity of financial markets depends upon adherence to fundamental legal and economic principles. Today, I come before you not with mere allegations of misconduct but with irrefutable evidence of systemic fraud at the highest levels of our financial system. I implore this Commission to open an immediate investigation into the Federal Reserve System, which has engaged in deceptive financial practices that violate both the letter and spirit of securities law.

The Federal Reserve purports to issue "money," yet we must ask: What exactly is a U.S. dollar? Under U.S. law, a dollar has a precise definition, one which Federal Reserve Notes do not meet. The Coinage Act of 1792 defined a dollar as 371.25 grains of pure silver or 24.75 grains of pure gold. This definition has never been repealed and remains the only lawful basis for what constitutes a dollar. Furthermore, the U.S. Constitution grants Congress the power to coin money and regulate its value—not to create money out of thin air or to delegate such authority to a private entity like the Federal Reserve.

Article I, Section 10, of the Constitution reinforces this by prohibiting states from making anything but gold and silver coin a tender in payment of debts. Yet, the Federal Reserve System operates outside these legal constraints, issuing irredeemable paper notes under the guise of lawful money. Federal Reserve Notes were once redeemable in gold, but that convertibility was revoked in 1933 for domestic transactions and eliminated entirely in 1971 under President Nixon. This severed the connection between Federal Reserve Notes and lawful money, rendering them unbacked securities—claims to dollars rather than dollars themselves. The Federal Reserve Notes currently circulating are not lawful money but instruments falsely claiming to be such.

The Securities and Exchange Commission is tasked with protecting investors and maintaining fair, orderly, and efficient markets. However, the Federal Reserve’s practices undermine these very principles. The issuance of Federal Reserve Notes, which lack lawful consideration, constitutes a violation of securities laws. Federal Reserve Notes are issued against government debt securities, but this debt is itself based on an unlawful premise: the monetization of instruments that do not meet the legal definition of money. The entire financial system, therefore, operates on a deception—an illusion of value that, in reality, rests on nothing but confidence and coercion.

31 U.S.C. § 5103 states that "United States coins and currency (including Federal Reserve Notes) are legal tender for all debts," but this provision does not override the Constitution or the Coinage Act. It merely states that Federal Reserve Notes are accepted as payment but does not redefine what a dollar is. The statutory definition of the dollar, as tied to gold and silver, remains intact. Any attempt to enforce the use of irredeemable paper notes as if they were lawful money constitutes an unconstitutional expansion of governmental power and a violation of fundamental securities principles.

The SEC has previously taken action against Ponzi schemes and fraudulent financial instruments, yet the Federal Reserve operates a system that exceeds the scale of any past fraud. It creates money out of nothing, lends it at interest, and expands or contracts its supply at will—manipulating markets in a manner that would be criminal for any private institution. Under existing securities laws, any entity issuing an instrument that falsely claims to be redeemable or backed by real value is engaged in securities fraud. If the Federal Reserve’s activities were undertaken by a private firm, the SEC would have shut it down long ago.

I anticipate that defenders of the Federal Reserve will argue that Congress has the sovereign authority to issue fiat currency and that legal precedent, such as Knox v. Lee and Julliard v. Greenman, has upheld the constitutionality of legal tender laws. However, these arguments fail on multiple fronts. First, the government does not possess powers that the people themselves do not have. The Declaration of Independence affirms that government derives its powers from the consent of the governed. If individuals cannot create money out of thin air and force others to accept it under penalty of law, then neither can Congress.

Second, precedent is not infallible. The Supreme Court has reversed itself when it recognized past rulings as unconstitutional or unjust, as in Brown v. Board of Education overturning Plessy v. Ferguson. Knox v. Lee and Julliard v. Greenman may have upheld legal tender laws, but precedent alone cannot override the Constitution’s explicit mandates regarding money.

Third, the argument that a return to a gold-backed system is impractical is misleading. The issue is not whether a gold standard is convenient, but whether fiat currency is lawful. It is not. The SEC is tasked with upholding legal and financial standards, not accommodating government overreach.

Fourth, the assertion that all modern economies operate on fiat currency does not justify systemic fraud. The United States is not bound to follow the errors of other nations. Historically, the most prosperous and stable periods in U.S. history were when money was tied to gold and silver. The rise of fiat currency has coincided with repeated economic crises, including the Great Depression, the 2008 financial collapse, and the ongoing expansion of unpayable national debt.

Finally, the SEC cannot ignore the financial exploitation at play. The Federal Reserve’s ability to create money ex nihilo allows it to extract real value from the economy while giving nothing of value in return. If an individual or a corporation engaged in such practices—issuing fraudulent instruments, manipulating markets, and coercing acceptance of worthless securities—they would be prosecuted under securities law. That the Federal Reserve operates under a congressional charter does not absolve it of fraudulent conduct; it makes the need for scrutiny even more urgent.

This Commission has the power and the duty to investigate financial fraud, regardless of how entrenched or politically protected it may be. It must recognize that Federal Reserve Notes are not lawful money, that the Federal Reserve’s issuance of these instruments constitutes systemic fraud, and that continued inaction enables economic exploitation on an unprecedented scale. The SEC must fulfill its mandate by launching an immediate investigation into the Federal Reserve System and its role in perpetuating this financial deception.

The law is clear. The Constitution does not grant Congress the power to create fiat currency, and any attempt to force its acceptance as the equivalent of lawful money is unconstitutional. The SEC was not established to legitimize fraud but to expose and prevent it. It is time to uphold the principles of transparency, integrity, and justice by holding the Federal Reserve accountable.

Respectfully submitted, 

Zachary Moore