U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19396 / September 27, 2005
SEC v. Amit Mathur, et al., (United States District Court for the District of Massachusetts, C.A. No. 05-10729MLW, filed September 14, 2005)
Commission Obtains Preliminary Injunction and Asset Freeze Against Louisiana Investment Adviser Accused of Misappropriating Millions from Clients
The Commission announced today that the Massachusetts federal district court entered a preliminary injunction and asset freeze on September 21, 2005 against defendant Rajeev Johar in connection with a fraud action filed by the Commission against Entrust Capital Management, Inc., a Worcester, Massachusetts-based investment advisory firm, and its principal Amit Mathur. The court's entry of preliminary injunction, which was consented to by the defendant, prohibits Johar, from engaging in future violations of the antifraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940 pending the resolution of the Commission's action. The Preliminary Injunction also freezes Johar's assets, limits his spending of newly acquired funds to $1,000 per week, requires him to submit an accounting of assets, and to return any funds sent overseas.
The Commission's amended complaint, filed on September 14, 2005, alleges that beginning in October 2000, Entrust, through Mathur and Johar, raised more than $16 million from approximately twenty investors. The complaint alleges, however, that Entrust, Mathur and Johar dissipated nearly all of their clients' assets through undisclosed trading losses in Entrust's brokerage accounts, unauthorized use of investor funds to support Entrust's operating expenses, and blatant misappropriation of client funds for personal use. The Commission's complaint also alleges that Entrust, Mathur and Johar transferred at least $1 million in investor funds to AMR Realty. The Commission alleges AMR Realty has no legitimate interest in those funds and that it should not be allowed to retain them. The Court entered a temporary restraining order and asset freeze against Mathur and Entrust and an asset freeze against AMR Realty on April 12, 2005.
For more information see [SEC v. Amit Mathur, et al., Civil Action No. 05-10729MLW, USDC, D.Mass.] (LR-19181, April 13, 2005).