SEC v. ANDREW W.W. CASPERSEN; and IRVING PLACE III SPV, LLC, No. 1:16-cv-02249, Southern District of New York (Mar. 28, 2016) — Complaint

Andrew M. Calamari
Sanjay Wadhwa
Gerald Gross
Paul G. Gizzi
James Hanson
Attorneys for
the Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
200 Vesey Street, Suite 400
New
York, New York 10281-1022
(212) 336-0087 (Hanson)
UNITED
STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
v.
ANDREW W.W. CASPERSEN
and
IRVING PLACE III SPV, LLC,
Defendants.
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COMPLAINT
ECFCASE
16-CV-
Plaintiff Securities and Exchange Commission (the "Commission") alleges the following
against defendants Andrew W.W. Caspersen ("Caspersen") and Irving Place III SPV, LLC
("Irving Place III SPV," and together with Caspersen, "Defendants"):
SUMMARY
I. Since at least October 2015 and continuing until the present, Caspersen, a
securities professional associated with a registered broker-dealer, has solicited approximately

$95 million in investments from two investors, offering promissory notes issued by defendant
Irving Place III SPV and carrying a  15% annual interest rate. Irving Place III SPV, however, is
nothing more than a shell entity formed and solely owned and controlled by Caspersen. It
appears to have no legitimate business. By false and misleading statements, in November 2015,
Caspersen obtained a $25 million investment, which was wired to Irving Place III
SPV's bank
account. Caspersen then simply took control
of the funds for his personal use. Using false and
misleading statements, Caspersen has since (so far unsuccessfully) solicited, and has continued
to solicit, at least an additional $70 million.
2. By this action, the Commission seeks injunctive relief, disgorgement of ill-gotten
gains plus prejudgment interest, and civil penalties.
VIOLATIONS
3. Based on the conduct alleged in this Complaint, Caspersen and Irving Place III
SPV violated Sections l 7(a)
of the Securities Act of 1933 ("Securities Act") [15 U.S.C. §§
77q(a)], and Section lO(b) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C.
§ 78j(b)] and Exchange Act Rule lOb-5 [17 C.F.R. § 240.lOb-5].
NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT
4. The Commission brings this action pursuant to authority conferred by Section
20(b)
of the Securities Act [15 U.S.C. § 77t(b)] and Section 2l(d)(l) of the Exchange Act [15
U.S.C. § 78u(d)(l}], seeking to permanently enjoin the Defendants from engaging in the acts,
practices, transactions and courses
of business alleged herein. The Commission also seeks a final
judgment: (i) ordering Defendants to disgorge, on a joint and several basis, all their ill-gotten
gains and to pay prejudgment interest thereon; and
(ii) imposing civil money penalties pursuant
to Section 20(d)
of the Securities Act [15 U.S.C. § 77t(d)] and Section 2l(d)(3) of the Exchange
2

Act (15 U.S.C. § 78u(d)(3)].
JURISDICTION AND VENUE
5. This Court has jurisdiction over this action pursuant to 28 U.S.C.
§ 1331, Sections
20(b), 20(d) and 22(a)
of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d), and 77v(a)] and
Sections 21(d),
2l(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].
6. Venue is proper in this district pursuant to 28 U.S.C. § 139l(b)(2), Section 22(a)
of the Securities Act [15 U.S.C. § 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. §
78aa]. A substantial part of the events or omissions giving rise to the claims herein occurred in
the Southern District
of New York. For instance, Caspersen orchestrated the illegal conduct
alleged herein from this district. Caspersen also resides in this district.
7. In connection with the conduct alleged in this complaint, the Defendants, directly
or indirectly, have made use of the means or instruments of transportation or communication in,
and the means or instrumentalities of, interstate commerce,
or of the mails, or of the facilities of
a national securities exchange.
DEFENDANTS
8. Caspersen, age 39, is a resident of New York City and Bronxville, NY. Since
January 2013, he has been a managing principal
of his employer, a broker-dealer registered with
the Commission. Between 2003 and 2012, Caspersen was a principal at a private equity firm
based in London, U.K. He graduated from Harvard Law School in 2002 and Princeton
University in 1999.
9. Irving Place III SPV is a Delaware limited liability company that Caspersen
founded in 2015. Irving Place III SPV and its bank account are controlled by Caspersen.
3

FACTS
10. In October 2015, Caspersen solicited a $25 million investment from "Investor
l,"
a non-profit charitable affiliate of an investment limited partnership. Caspersen offered Investor
1 a promissory note issued by Irving Place III SPV. The promissory note promised 15% annual
interest, payable quarterly, and was fully redeemable on 90 days' notice. While soliciting this
investment, Caspersen told Investor 1 that its $25 million investment would be secured by
approximately $900 million
of assets of Irving Place Capital Partners III SPV.
11. When Caspersen created his LLC, he deceptively named it Irving Place III SPV,
so that others would deem it affiliated with Irving Place Capital Partners III SPV, a legitimate
private equity fund not associated with Caspersen. Unlike Irving Place Capital Partners III SPV,
Irving Place III SPV had no legitimate business. Rather, Irving Place III SPV is only a vehicle to
solicit money from investors, and its only asset is a bank account controlled by Caspersen.
12.
To facilitate this offering, Caspersen drafted a promissory note and a security
agreement, and he apparently signed these documents on behalf
of Irving Place III SPV using the
fictitious name, John Nelson. The note and agreement memorialized the offering terms
of the
investment that Caspersen had solicited from Investor
1.
13. On November 5, 2016, Investor I made its $25 million investment using wire
instructions provided by Caspersen, and transferred the $25 million to Irving Place III
SPV's
bank account at Bank of America, an account controlled by Caspersen.
14. Caspersen thereafter simply took control of these funds for his personal use.
15. While soliciting this investment, Caspersen and Irving Place III SPV misleadingly
did not disclose to Investor 1 that: (i) they were not associated with Irving Place Capital Partners
III SPV nor were they authorized
to grant a security interest; (ii) Irving Place III SPV was solely
4

controlled by Caspersen and had no legitimate business; and (iii) Caspersen intended to use the
investment proceeds for his personal use.
16. In March 2016, Caspersen solicited an additional
$20 million investment from
Investor 1 and a
$50 million investment from another potential investor. During these
solicitations, Caspersen made similar misleading representations as he had with Investor 1
's $25
million investment.
17. By this time, however, Investor 1 had become suspicious
of the source of the first
interest payment received from Irving Place III SPV, and told Caspersen that it would
not invest
more money and wanted to redeem its $25 million investment.
FIRST CLAIM FOR RELIEF
Violations of Section 17(a) of the Securities Act
(Caspersen and Irving Place III SPV)
18. The Commission re-alleges and incorporates by reference herein each and every
allegation contained in paragraphs 1 through
17 of this Complaint.
19. From at least October 2015 to the present, Caspersen and Irving Place III SPY,
directly
or indirectly, singly or in concert, by use of the means or instruments of transportation or
communication in interstate commerce, or of the mails, in the offer or sale of securities, have: (a)
employed devices, schemes and artifices to defraud; (b) obtained money
or property by means of
untrue statements of material fact, or have omitted to state material facts necessary in order to
make statements made, in light
of the circumstances under which they were made, not
misleading; and ( c) engaged in transactions, practices and courses
of business which operated or
would have operated as a  fraud or deceit upon purchasers.
20. By reason
of the foregoing, Caspersen and Irving Place III SPV have violated,
and, unless enjoined, are reasonably likely to continue to violate, Section 17(a)
of the Securities
5

Act (15 U.S.C. § 77q(a)].
SECOND CLAIM FOR RELIEF
Violation of Section lO(b) of the Exchange Act and Rule lOb-5
(Caspersen
and Irving Place III SPV)
21. The Commission re-alleges and incorporates by reference herein each and every
allegation contained in paragraphs 1 through
17 of this Complaint.
22. From at least October 2015 to the present, Caspersen and Irving Place III SPV,
directly
or indirectly, singly or in concert, by use of the means or instrumentalities of interstate
commerce, or
of the mails, or of the facilities of a national securities exchange, in connection
with the purchase or sale
of securities, have: (a) employed devices, schemes and artifices to
defraud; (b
}made untrue statements of material fact, or omitted to state material facts necessary
in order to make statements made, in light
of the circumstances under which they were made, not
misleading; and ( c) engaged in acts, practices and courses
of business which operated or would
have operated as a fraud
or deceit upon investors.
23. By reason
of the foregoing, Caspersen and Irving Place III SPV have violated,
and, unless enjoined, are reasonably likely to continue to violate, Section IO(b)
of the Exchange
Act [15 U.S.C.
§ 78j(b)] and Rule lOb-5 [17 C.F.R. § 240.lOb-5].
6

PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that the Court grant the following
relief:
I.
A Final Judgment permanently restraining and enjoining Defendants, their agents,
servants, employees and attorneys and all persons in active concert
or participation with them,
who receive actual notice
of the injunction by personal service or othef"".ise, and each of them,
from committing future violations
of each of the securities laws and rules promulgated
thereunder as alleged herein.
II.
A Final Judgment ordering Defendants to disgorge, on a joint and several basis, all their
ill-gotten gains, and to pay prejudgment interest thereon.
III.
A Final Judgment ordering Defendants to pay civil money penalties pursuant to Section
20(d) of the Securities Act (15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act (15
U.S.C.
§ 78u(d)(3)].
7

IV.
Such other and further relief as this Court deems just and proper.
Dated: March 28, 2016
New York,
New York
8
Sanjay Wadhwa
Andrew M. Calamari
Gerald Gross
Paul G. Gizzi
James Hanson
New York Regional Office
SECURITIES AND EXCHANGE
COMMISSION
200 Vesey Street, Suite 400
New York, New York 10281
(212) 336-0087 (Hanson)
Attorneys for the Plaintiff

Andrew M. Calamari 
Sanjay Wadhwa 
Gerald Gross 
Paul G. Gizzi 
James Hanson 
Attorneys for the Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
200 Vesey Street, Suite 400 
New York, New York 10281-1022 
(212) 336-0087 (Hanson) 

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 

v. 

ANDREW W.W. CASPERSEN 
and 
IRVING PLACE III SPV, LLC, 

Defendants. 

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·} 
) 
) 
) 
) 
) 
) 
) 
) 
) 
) 

COMPLAINT 

ECFCASE 

16-CV-

Plaintiff Securities and Exchange Commission (the "Commission") alleges the following 

against defendants Andrew W.W. Caspersen ("Caspersen") and Irving Place III SPV, LLC 

("Irving Place III SPV," and together with Caspersen, "Defendants"): 

SUMMARY 

I. Since at least October 2015 and continuing until the present, Caspersen, a 

securities professional associated with a registered broker-dealer, has solicited approximately 

Case 1:16-cv-02249 Document 1 Filed 03/28/16 Page 1 of 8 



   

$95 million in investments from two investors, offering promissory notes issued by defendant 

Irving Place III SPV and carrying a 15% annual interest rate. Irving Place III SPV, however, is 

nothing more than a shell entity formed and solely owned and controlled by Caspersen. It 

appears to have no legitimate business. By false and misleading statements, in November 2015, 

Caspersen obtained a $25 million investment, which was wired to Irving Place III SPV's bank 

account. Caspersen then simply took control of the funds for his personal use. Using false and 

misleading statements, Caspersen has since (so far unsuccessfully) solicited, and has continued 

to solicit, at least an additional $70 million. 

2. By this action, the Commission seeks injunctive relief, disgorgement of ill-gotten 

gains plus prejudgment interest, and civil penalties. 

VIOLATIONS 

3. Based on the conduct alleged in this Complaint, Caspersen and Irving Place III 

SPV violated Sections l 7(a) of the Securities Act of 1933 ("Securities Act") [15 U.S.C. §§ 

77q(a)], and Section lO(b) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. 

§ 78j(b)] and Exchange Act Rule lOb-5 [17 C.F.R. § 240.lOb-5]. 

NATURE OF THE PROCEEDINGS AND RELIEF SOUGHT 

4. The Commission brings this action pursuant to authority conferred by Section 

20(b) of the Securities Act [15 U.S.C. § 77t(b)] and Section 2l(d)(l) of the Exchange Act [15 

U.S.C. § 78u(d)(l}], seeking to permanently enjoin the Defendants from engaging in the acts, 

practices, transactions and courses of business alleged herein. The Commission also seeks a final 

judgment: (i) ordering Defendants to disgorge, on a joint and several basis, all their ill-gotten 

gains and to pay prejudgment interest thereon; and (ii) imposing civil money penalties pursuant 

to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 2l(d)(3) of the Exchange 

2 

Case 1:16-cv-02249 Document 1 Filed 03/28/16 Page 2 of 8 



   

Act (15 U.S.C. § 78u(d)(3)]. 

JURISDICTION AND VENUE 

5. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331, Sections 

20(b), 20(d) and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d), and 77v(a)] and 

Sections 21(d), 2l(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa]. 

6. Venue is proper in this district pursuant to 28 U.S.C. § 139l(b)(2), Section 22(a) 

of the Securities Act [15 U.S.C. § 77v(a)] and Section 27 of the Exchange Act [15 U.S.C. § 

78aa]. A substantial part of the events or omissions giving rise to the claims herein occurred in 

the Southern District of New York. For instance, Caspersen orchestrated the illegal conduct 

alleged herein from this district. Caspersen also resides in this district. 

7. In connection with the conduct alleged in this complaint, the Defendants, directly 

or indirectly, have made use of the means or instruments of transportation or communication in, 

and the means or instrumentalities of, interstate commerce, or of the mails, or of the facilities of 

a national securities exchange. 

DEFENDANTS 

8. Caspersen, age 39, is a resident of New York City and Bronxville, NY. Since 

January 2013, he has been a managing principal of his employer, a broker-dealer registered with 

the Commission. Between 2003 and 2012, Caspersen was a principal at a private equity firm 

based in London, U.K. He graduated from Harvard Law School in 2002 and Princeton 

University in 1999. 

9. Irving Place III SPV is a Delaware limited liability company that Caspersen 

founded in 2015. Irving Place III SPV and its bank account are controlled by Caspersen. 

3 

Case 1:16-cv-02249 Document 1 Filed 03/28/16 Page 3 of 8 



   

FACTS 

10. In October 2015, Caspersen solicited a $25 million investment from "Investor l," 

a non-profit charitable affiliate of an investment limited partnership. Caspersen offered Investor 

1 a promissory note issued by Irving Place III SPV. The promissory note promised 15% annual 

interest, payable quarterly, and was fully redeemable on 90 days' notice. While soliciting this 

investment, Caspersen told Investor 1 that its $25 million investment would be secured by 

approximately $900 million of assets of Irving Place Capital Partners III SPV. 

11. When Caspersen created his LLC, he deceptively named it Irving Place III SPV, 

so that others would deem it affiliated with Irving Place Capital Partners III SPV, a legitimate 

private equity fund not associated with Caspersen. Unlike Irving Place Capital Partners III SPV, 

Irving Place III SPV had no legitimate business. Rather, Irving Place III SPV is only a vehicle to 

solicit money from investors, and its only asset is a bank account controlled by Caspersen. 

12. To facilitate this offering, Caspersen drafted a promissory note and a security 

agreement, and he apparently signed these documents on behalf of Irving Place III SPV using the 

fictitious name, John Nelson. The note and agreement memorialized the offering terms of the 

investment that Caspersen had solicited from Investor 1. 

13. On November 5, 2016, Investor I made its $25 million investment using wire 

instructions provided by Caspersen, and transferred the $25 million to Irving Place III SPV's 

bank account at Bank of America, an account controlled by Caspersen. 

14. Caspersen thereafter simply took control of these funds for his personal use. 

15. While soliciting this investment, Caspersen and Irving Place III SPV misleadingly 

did not disclose to Investor 1 that: (i) they were not associated with Irving Place Capital Partners 

III SPV nor were they authorized to grant a security interest; (ii) Irving Place III SPV was solely 

4 

Case 1:16-cv-02249 Document 1 Filed 03/28/16 Page 4 of 8 



   

controlled by Caspersen and had no legitimate business; and (iii) Caspersen intended to use the 

investment proceeds for his personal use. 

16. In March 2016, Caspersen solicited an additional $20 million investment from 

Investor 1 and a $50 million investment from another potential investor. During these 

solicitations, Caspersen made similar misleading representations as he had with Investor 1 's $25 

million investment. 

17. By this time, however, Investor 1 had become suspicious of the source of the first 

interest payment received from Irving Place III SPV, and told Caspersen that it would not invest 

more money and wanted to redeem its $25 million investment. 

FIRST CLAIM FOR RELIEF 

Violations of Section 17(a) of the Securities Act 
(Caspersen and Irving Place III SPV) 

18. The Commission re-alleges and incorporates by reference herein each and every 

allegation contained in paragraphs 1 through 17 of this Complaint. 

19. From at least October 2015 to the present, Caspersen and Irving Place III SPY, 

directly or indirectly, singly or in concert, by use of the means or instruments of transportation or 

communication in interstate commerce, or of the mails, in the offer or sale of securities, have: (a) 

employed devices, schemes and artifices to defraud; (b) obtained money or property by means of 

untrue statements of material fact, or have omitted to state material facts necessary in order to 

make statements made, in light of the circumstances under which they were made, not 

misleading; and ( c) engaged in transactions, practices and courses of business which operated or 

would have operated as a fraud or deceit upon purchasers. 

20. By reason of the foregoing, Caspersen and Irving Place III SPV have violated, 

and, unless enjoined, are reasonably likely to continue to violate, Section 17(a) of the Securities 

5 

Case 1:16-cv-02249 Document 1 Filed 03/28/16 Page 5 of 8 



   

Act (15 U.S.C. § 77q(a)]. 

SECOND CLAIM FOR RELIEF 

Violation of Section lO(b) of the Exchange Act and Rule lOb-5 
(Caspersen and Irving Place III SPV) 

21. The Commission re-alleges and incorporates by reference herein each and every 

allegation contained in paragraphs 1 through 17 of this Complaint. 

22. From at least October 2015 to the present, Caspersen and Irving Place III SPV, 

directly or indirectly, singly or in concert, by use of the means or instrumentalities of interstate 

commerce, or of the mails, or of the facilities of a national securities exchange, in connection 

with the purchase or sale of securities, have: (a) employed devices, schemes and artifices to 

defraud; (b }made untrue statements of material fact, or omitted to state material facts necessary 

in order to make statements made, in light of the circumstances under which they were made, not 

misleading; and ( c) engaged in acts, practices and courses of business which operated or would 

have operated as a fraud or deceit upon investors. 

23. By reason of the foregoing, Caspersen and Irving Place III SPV have violated, 

and, unless enjoined, are reasonably likely to continue to violate, Section IO(b) of the Exchange 

Act [15 U.S.C. § 78j(b)] and Rule lOb-5 [17 C.F.R. § 240.lOb-5]. 

6 

Case 1:16-cv-02249 Document 1 Filed 03/28/16 Page 6 of 8 



   

PRAYER FOR RELIEF 

WHEREFORE, the Commission respectfully requests that the Court grant the following 

relief: 

I. 

A Final Judgment permanently restraining and enjoining Defendants, their agents, 

servants, employees and attorneys and all persons in active concert or participation with them, 

who receive actual notice of the injunction by personal service or othef"".ise, and each of them, 

from committing future violations of each of the securities laws and rules promulgated 

thereunder as alleged herein. 

II. 

A Final Judgment ordering Defendants to disgorge, on a joint and several basis, all their 

ill-gotten gains, and to pay prejudgment interest thereon. 

III. 

A Final Judgment ordering Defendants to pay civil money penalties pursuant to Section 

20(d) of the Securities Act (15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act (15 

U.S.C. § 78u(d)(3)]. 

7 

Case 1:16-cv-02249 Document 1 Filed 03/28/16 Page 7 of 8 



   

IV. 

Such other and further relief as this Court deems just and proper. 

Dated: March 28, 2016 
New York, New York 

8 

Sanjay Wadhwa 
Andrew M. Calamari 
Gerald Gross 
Paul G. Gizzi 
James Hanson 
New York Regional Office 
SECURITIES AND EXCHANGE 

COMMISSION 
200 Vesey Street, Suite 400 
New York, New York 10281 
(212) 336-0087 (Hanson) 
Attorneys for the Plaintiff 

Case 1:16-cv-02249 Document 1 Filed 03/28/16 Page 8 of 8