On August 20, 2015 The SEC announced that it had obtained a preliminary injunction freezing the assets of Iftikar Ahmed, an investment professional, who they charged with running a 10 year fraud at the venture capital firm where he previously was employed, Oak Investment Partners.
The SEC filed its emergency action against Iftikar Ahmed in May and alleged that he obtained approximately $65,000,000 improperly. On May 7, 2015, the court imposed a temporary restraining order on Ahmed imposing an asset freeze on him, and on August 12, 2015, the U.S. District Court for the District of Connecticut issued an order granting the SEC’s motion for a preliminary injunction continuing the asset freeze up to approximately $118,000,000.
The SEC alleges that Iftikar Ahmed used a variety of fraudulent means to perpetrate his scheme and generate illicit profits in connection with multiple securities transactions. Among other things, Ahmed overstated the prices of investments in companies by altering deal documents, pocketing the difference for himself.
Ahmed also used fictitious invoices for purported expenses related to Oak’s investment in various companies, which he caused Oak or the companies to pay and, again, pocketed the profits. Ahmed attempted to conceal his fraud by directing that Oak and the companies make payments to bank accounts that Ahmed claimed belonged to the counterparty to the deals, but which in fact Ahmed secretly owned and controlled.
The SEC alleges that Iftikar Ahmed violated the federal antifraud laws and related SEC antifraud rules and seeks a judgment ordering him to pay penalties, return any ill-gotten gains with prejudgment interest, and be subject to permanent injunctions from future violations of the antifraud laws.
The above allegations contained in the SEC’s complaint have not been proven, and the issuance of a complaint represents the SEC’s initiation of a formal proceeding in which findings as to the allegations in the complaint have not been made, and does not represent a decision as to any of the allegations contained in the complaint.
The Law Office of David Liebrader practices exclusively in the field of investment loss recovery. For the past 23 years, we have dedicated our law practice to assisting investors who have been victims of investment fraud via fraudulent and unsuitable investment transactions. During that time we have recovered money for over one thousand individuals, pension plans, trusts and companies. The recoveries we have obtained via judgments, awards and settlements on behalf of our clients exceed $40,000,000.
When investors contact our firm they can expect prompt attention, and a detailed analysis of their issues. Typical claims that we are asked to review involve “unsuitability (where a financial advisor makes investment recommendations that are inconsistent with a customer’s investment objectives), claims for “churning” (where a broker enters into an excessive number of trades for the purpose of generating commissions), claims involving illiquid investments such as private placements (I.e., real estate investment trusts, limited partnerships, equipment leasing and oil and gas drilling programs) as well as claims for violations of state securities laws, which often provide investors remedies like attorney’s fees and interest, if they are successful on the claim.
Since a Supreme Court ruling in the 1980s, most investment related disputes between brokerage firms and their customers have been filed in an arbitration forum hosted by FINRA Dispute Resolution. FINRA, along with the SEC, serves as a securities industry “watchdog” and regulator. Most brokerage firms require their clients to sign binding arbitration agreements, mandating that any disputes between them be arbitrated at FINRA.
Investors pursuing claims at FINRA typically advance claims related to suitability. FINRA rules require that all registered representatives make suitable investment recommendations to their clients. Other claims are based on negligence or breach of fiduciary duty, while another category includes claims based on misrepresentations and fraud. Most claims filed with FINRA are resolved within 15 months, and oftentimes, the cases are resolved via settlement or mediation in under a year.
FINRA’s rules require that all investment recommendations made by licensed financial advisors be suitable in light of a customer’s needs, objectives and risk tolerance. In addition, all registered representatives are required to be properly supervised, with periodic inspections and reviews by qualified supervisors, whose job it is to vigorously investigate suspicions of wrongdoing (red flags).
If you suspect that you have been the victim of investment fraud, or had a financial advisor recommend unsuitable investments to you, call us today for a free, confidential consultation at (702) 380-3131.