Is it legal to defraud people in other countries from the US? I can't imagine that it is.

Most countries have their own security laws and enforcement departments, which are nominally there to protect the interests of their citizens. Examples: https://sfo.govt.nz/ https://en.m.wikipedia.org/wiki/Financial_Conduct_Authority https://www.afp.gov.au/what-we-do/crime-types/fraud/fraud-an... However the enforcement departments usually appear to me to be underfunded and quite weak, even against fraud within their own country, and it seems rare they indict overseas parties even when citizens are deeply impacted.

The SEC is unusually strong (which might surprise you), and because the American market is so wealthy and the rules are relatively clear, the SEC has a huge influence over investment structure.

Well he's in the bahamas, not the US.