SEC Settles Fraud Charges with IIG Executive Director
July 22, 2020
File No. 3-19891
July 22, 2020 - The Securities and Exchange Commission today announced settled charges against Carlos Cano, an executive director of former registered investment adviser International Investment Group, LLC (IIG), in connection with his role in IIG's $60 million fraudulent scheme.
According to the SEC's order, since at least 2014, Cano played a key role in perpetrating various frauds on IIG's investment advisory clients to hide heavy losses in the flagship fund that IIG advised. The order finds that Cano participated in the scheme by assisting in the acquisition and creation of shell companies to act as nominal borrowers of fake trade finance loans, obtaining fraudulent promissory notes purporting to memorialize the loans, and presenting forged loan documentation to advisory clients.
The SEC's order finds that Cano violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and aided and abetted and caused IIG's violations of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. Without admitting or denying the findings in the SEC's order, Cano consented to the entry of a cease-and-desist order and agreed to pay a civil monetary penalty of $300,000. Cano also agreed to an associational bar and an investment company prohibition.
The SEC previously charged IIG with fraud on November 21, 2019 and revoked IIG's registration as an investment adviser on November 26, 2019. On March 30, 2020, the SEC obtained a final judgment on consent that enjoins IIG from violating the antifraud provisions of the federal securities laws and requires IIG to pay more than $35 million in disgorgement and prejudgment interest. On July 17, 2020, the SEC filed fraud charges against David Hu, one of IIG's co-founders, who was also charged by the U.S. Attorney's Office for the Southern District of New York in a parallel criminal action.
The SEC's ongoing investigation is being conducted by Philip A. Fortino, Lindsay Moilanen, Diego Brucculeri, and Sheldon L. Pollock of the New York Regional Office and Osman Nawaz of the Complex Financial Instruments Unit, with assistance from Eli Bass of the Office of Compliance Inspections and Examinations, and is being supervised by Sanjay Wadhwa and Daniel Michael.