(HedgeCo.Net) The U.S. District Court for the Southern District of New York has final consent judgments against Amin Majidi, a portfolio manager for a private fund advised by now-defunct New York-based investment adviser Premium Point Investments LP, and Ashish Dole, a Premium Point trader, permanently enjoining them from violating the antifraud and other provisions of the federal securities laws.
According to the SEC’s complaint, Premium Point engaged in a fraudulent valuation scheme that resulted in the inflation of the value of private funds Premium Point advised by hundreds of millions of dollars from at least September 2015 through March 2016. The scheme relied on a secret deal where in exchange for sending trades to a broker-dealer, Premium Point received inflated broker quotes for mortgage-backed securities, as well as the use of “imputed” mid-point valuations, which were applied in a manner that further inflated the value of securities. This practice boosted the value of many of Premium Point’s holdings and further exaggerated returns in order to conceal poor fund performance and attract and retain investors.
The SEC’s complaint charged Majidi and Dole with violations of Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder and Sections 17(a)(1) and (3) of the Securities Act of 1933, as well as with aiding and abetting violations of Sections 206(1), (2), and (4) of the Investment Advisers Act of 1940 and Rule 206(4)-8(a)(2) thereunder; and also charged Majidi with violations of Advisers Act Sections 206(1), (2), and (4) and Rule 206(4)-8(a)(2) thereunder.
The SEC previously charged Premium Point, along with Majidi, Premium Point’s CEO and chief investment officer Anilesh Ahuja, and another trader, with fraud on May 9, 2018, later amending its complaint to add Dole as a defendant. On September 20, 2022, the SEC obtained a final judgment on consent enjoining Premium Point and Ahuja from violating the antifraud and other provisions of the federal securities laws and ordering Ahuja to pay a civil penalty.
