SEC Charges Former Head of Abraaj Global Fundraising for Conduct That Misled Private Fund Investors and Potential Investors
March 2, 2022
File No. 3-20786
March 2, 2022 - The Securities and Exchange Commission today announced settled charges against Tennessee resident Mark Bourgeois, the Abraaj Group's former Head of Global Fundraising, for his actions in 2017 and 2018 that helped now-defunct Abraaj mislead investors and potential investors about the Dubai-based private equity firm's performance track record in the offer and sale of its newest fund.
According to the SEC's order, in offering investments in Abraaj's new $6 billion global emerging markets private pooled investment vehicle, called APEF VI, potential investors were provided with an inflated performance track record for existing investments in prior funds managed by Abraaj's investment adviser entity, Abraaj Investment Management Limited ("AIML"). The order finds that from 2017 through the beginning of 2018, AIML investment personnel responsible for valuations stated internally that certain write-downs were needed for a number of portfolio companies held by private equity funds managed by AIML. According to the order, Bourgeois-one of Abraaj's managing partners, the CEO of its New York office, and the global head of fundraising and investor relations-was aware of these advised write-downs on at least two separate occasions. The order finds that Bourgeois recommended that AIML not apply the write-downs (or delay doing so) to avoid the negative impact on APEF VI fundraising he anticipated would result if AIML's lower track record was shared with potential investors.
The SEC's order finds that Bourgeois willfully violated the antifraud provisions of Section 17(a)(2) of the Securities Act of 1933 and willfully aided and abetted and caused AIML's violations of the antifraud provisions of Sections 17(a)(1) and (3) of the Securities Act and of Section 206(4) of the Advisers Act and Rule 206(4)-8 thereunder. Bourgeois agreed to a cease-and-desist order, to pay disgorgement of approximately $2 million, to cooperate in the Commission's ongoing investigation and litigation relating to Abraaj, and to a collateral associational bar and investment company prohibition with the right to reapply after three years.
The SEC's investigation was conducted by David Neuman from the Asset Management Unit, and supervised by David Becker. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York and the Federal Bureau of Investigation.