SEC Charges Investment Advisor Engaged in $60 Million Fraud

The Securities and Exchange Commission recently charged investment advisor International Investment Group LLC (IIG) with securities fraud for hiding losses in its hedge fund and selling at least $60 million in fake loan assets to clients. The SEC also has revoked IIG’s registration.

The SEC alleges that IIG artificially inflated the value of defaulted loans it was holding in order to hide losses in its hedge fund. The SEC further alleges that IIG doctored its records to falsely show that the defaulted loans had been satisfied and that the proceeds had been used to make new loans. The SEC alleges that the loans, in actuality, had not been satisfied and the new loans were phony. 

The SEC also alleges that IIG sold $60 million in fake loans to clients in order to meet redemption requests. As part of the scheme, the SEC alleges that IIG created phony promissory notes and a forged credit agreement.

Daniel Michael, chief of the SEC’s Complex Financial Instruments Unit, stated: “This case shows that even sophisticated professional investors can fall victim to Ponzi schemes. The revocation of IIG’s registration is necessary to protect the public in light of IIG’s egregious breaches of its fiduciary duty as an investment [advisor].”

IIG has consented to a bifurcated settlement enjoining it from future violations of securities laws’ antifraud provisions. A preliminary asset freeze also has been entered.

If you believe you have a claim relating to IIG’s misconduct, please contact one of our attorneys at 800-816-1031. The attorneys in the Business Trial Group have helped investors recover tens of millions of dollars of investment losses. And, as part of the largest contingency law firm in the nation, we help investors recover their financial losses on a contingency basis, which means that we are only paid if we successfully recover money for you.