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West Palm Beach (HedgeCo.net) – The Securities and Exchange Commission yesterday recieved permission to freeze the assets of Mohit A. Khanna, who alledgedly raised as much as $70 million from 300 investors though his fund, MAK 1 Enterprises Group, LLC.
The SEC says he solicited investors in Southern California and several other states, as well as a charitable foundation, through word-of-mouth referrals and a website. The defendant claimed to pool investor funds to invest in commercial paper, foreign currency trading products, and other investments, which the SEC believes to be non-existent. Instead, Khanna misused investor funds to pay for several luxury cars and residential properties, including those now owned by his wife, Sharanjit Khanna of San Diego, Calif., who was also named as a relief defendant.
The complaint alleges Khanna fabricated and gave to an accountant a “screen shot” of MAK 1′s online banking activity purporting to show a balance of over $50 million in its bank account, in reality, the average daily balance in that account never exceeded $197,000.
The SEC seeks preliminary and permanent injunctions, disgorgement, prejudgment interest, and financial penalties against Khanna and MAK 1. Court will hold a hearing on August 31, 2009.
The SEC had help from the FBI, the U.S. Attorney’s Office for the Southern District of California, U.S. Postal Inspection Service, National Futures Association, and the Better Business Bureau – San Diego.
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The Ledger – Federal regulators announced an agreement with Maurice R. Greenberg on Thursday to settle accusations that he oversaw an accounting fraud at the American International Group.
But Mr. Greenberg did not go quietly.
Shortly after the announcement from the Securities and Exchange Commission, Mr. Greenberg issued a defiant statement saying he had ”no responsibility” for the fraud at A.I.G., which he ran for about four decades ending in 2005.
Under the settlement, Mr. Greenberg agreed to pay just $15 million in penalties and disgorgement for overseeing fraudulent transactions at A.I.G.
West Palm Beach (HedgeCo.net) – The Securities and Exchange Commission filed a restraining order yesterday to halt an on-going multi-million dollar Ponzi scheme. The SEC says that Defendant, Toronto hedge-fund manager Weizhen Tang, orchestrated the fraud through an overseas hedge fund and a Texas-based investment adviser.
U.S. District Judge Jane Boyle granted a temporary restraining order, asset freeze, and other emergency relief against the Defendants, including the appointment of a receiver to take control of assets belonging to the Investment Adviser and two Relief Defendants — WinWin Capital Partners, LP, and Bluejay Investment, LLC, d/b/a Vintage International Investment, LLC.
The fraud began as early as 2004, and through the hedge fund Tang raised between $50 million and $75 million from more than 200 investors. According to the SEC complaint, Weizhen Tang (the self-described “Chinese Warren Buffet”) recently admitted to investors that the hedge fund operated as a Ponzi scheme since at least 2006.
Tang specifically targeted members of the Chinese-American community and solicited U.S. investors to directly and indirectly invest in the hedge fund, according to the SEC.
In addition to the emergency relief granted by the Court, the SEC wants permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, and civil money penalties against the Defendants.
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