SEC v. Premium Point Investments, LP; Anilesh Ahuja; Amin Majidi; and Jeremy Shor, No. LR-24138, Southern District of New York (May 9, 2018) — Press Release

SEC Charges Hedge Fund Adviser with Deceiving Investors by Inflating Fund Performance Litigation Release No. 24138 / May 9, 2018 Securities and Exchange Commission v. Premium Point Investments, LP et al., Civil Action No. 1:18-cv-04145 (S.D.N.Y. filed May 9, 2018) The Securities and Exchange Commission today announced that it has charged New York-based investment adviser Premium Point Investments LP with inflating the value of private funds it advised by hundreds of millions of dollars. The SEC also charged Premium Point's CEO and chief investment officer Anilesh Ahuja as well as Amin Majidi, a former partner and portfolio manager at the firm, and former trader Jeremy Shor. According to the SEC's complaint, the scheme ran from at least September 2015 through March 2016 and 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 (MBS). In addition, the defendants allegedly used "imputed" mid-point valuations, which were applied in a manner that further inflated the value of securities. This practice allegedly boosted the value of many of Premium Point's MBS holdings and further exaggerated returns. The complaint alleges that the defendants overstated the funds' value in order to conceal poor fund performance and attract and retain investors. The SEC's complaint, filed in U.S. District Court for the Southern District of New York, charges: (i) PPI, Ahuja, Majidi, and Shor with violations of Section 10(b) of the Securities Exchange Act of 1934, Rules 10b-5(a) and (c) thereunder, and Sections 17(a)(1) and (3) of the Securities Act of 1933; (ii) PPI, Ahuja, and Majidi with violations of Sections 206(1), (2), and (4) of the Investment Advisers Act of 1940 (Advisers Act), and Rule 206(4)-8(a)(2) thereunder; (iii) Shor, Ahuja, and Majidi with aiding and abetting violations of Advisers Act Sections 206(1), (2), and (4) and Rule 206(4)-8(a)(2) thereunder; and (iv) PPI with violations of Advisers Act Section 206(4) and Rule 206(4)-2 thereunder. The SEC complaint seeks permanent injunctions, return of any ill-gotten gains with interest, and civil penalties. The U.S. Attorney's Office for the Southern District of New York, which conducted a parallel investigation of this matter, today announced charges against Ahuja, Majidi, and Shor. The SEC's investigation, which is continuing, was conducted by H. Gregory Baker and Brian Fitzpatrick of the Asset Management Unit, Osman Nawaz of the Complex Financial Instruments Unit, and Preethi Krishnamurthy of the New York Regional Office under the supervision of Mark D. Salzberg of the Asset Management Unit. The litigation is being conducted by Ms. Krishnamurthy, Mr. Baker, and Mr. Nawaz. The SEC acknowledges the assistance and cooperation of the U.S. Attorney's Office and the FBI in this matter. SEC Complaint

SEC Charges Hedge Fund Adviser with Deceiving Investors by Inflating Fund Performance Litigation Release No. 24138 / May 9, 2018 Securities and Exchange Commission v. Premium Point Investments, LP et al., Civil Action No. 1:18-cv-04145 (S.D.N.Y. filed May 9, 2018) The Securities and Exchange Commission today announced that it has charged New York-based investment adviser Premium Point Investments LP with inflating the value of private funds it advised by hundreds of millions of dollars. The SEC also charged Premium Point's CEO and chief investment officer Anilesh Ahuja as well as Amin Majidi, a former partner and portfolio manager at the firm, and former trader Jeremy Shor. According to the SEC's complaint, the scheme ran from at least September 2015 through March 2016 and 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 (MBS). In addition, the defendants allegedly used "imputed" mid-point valuations, which were applied in a manner that further inflated the value of securities. This practice allegedly boosted the value of many of Premium Point's MBS holdings and further exaggerated returns. The complaint alleges that the defendants overstated the funds' value in order to conceal poor fund performance and attract and retain investors. The SEC's complaint, filed in U.S. District Court for the Southern District of New York, charges: (i) PPI, Ahuja, Majidi, and Shor with violations of Section 10(b) of the Securities Exchange Act of 1934, Rules 10b-5(a) and (c) thereunder, and Sections 17(a)(1) and (3) of the Securities Act of 1933; (ii) PPI, Ahuja, and Majidi with violations of Sections 206(1), (2), and (4) of the Investment Advisers Act of 1940 (Advisers Act), and Rule 206(4)-8(a)(2) thereunder; (iii) Shor, Ahuja, and Majidi with aiding and abetting violations of Advisers Act Sections 206(1), (2), and (4) and Rule 206(4)-8(a)(2) thereunder; and (iv) PPI with violations of Advisers Act Section 206(4) and Rule 206(4)-2 thereunder. The SEC complaint seeks permanent injunctions, return of any ill-gotten gains with interest, and civil penalties. The U.S. Attorney's Office for the Southern District of New York, which conducted a parallel investigation of this matter, today announced charges against Ahuja, Majidi, and Shor. The SEC's investigation, which is continuing, was conducted by H. Gregory Baker and Brian Fitzpatrick of the Asset Management Unit, Osman Nawaz of the Complex Financial Instruments Unit, and Preethi Krishnamurthy of the New York Regional Office under the supervision of Mark D. Salzberg of the Asset Management Unit. The litigation is being conducted by Ms. Krishnamurthy, Mr. Baker, and Mr. Nawaz. The SEC acknowledges the assistance and cooperation of the U.S. Attorney's Office and the FBI in this matter. SEC Complaint