Anthony Caine; Anish Parvataneni; LJM Funds Management, Ltd.; LJM Partners, Ltd.
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26338 / July 1, 2025
Securities and Exchange Commission v. Anthony Caine, et al., No. 1:21-cv-02859 (N.D. Ill. filed May 27, 2021)
SEC Settles Charges Against Advisers and Portfolio Managers in Lawsuit Alleging Misrepresentations About Risks in Funds That Lost More than $1 Billion
On June 30, 2025, the Securities and Exchange Commission obtained final judgments by consent against Defendants Antony Caine, Anish Parvataneni, LJM Funds Management, Ltd. (“LJMFM”) and LJM Partners, Ltd. (collectively with LJMFM, “LJM”), whom the SEC previously charged with allegedly defrauding investors by making false and misleading statements about the risks of LJM’s “net short” options trading strategy and LJM’s risk management practices.
The SEC’s complaint alleged that defendants breached their fiduciary duties and made material misrepresentations relating to the worst-case loss estimates for the LJM managed funds and the funds’ risks. The complaint further alleged that the misrepresentations allowed defendants to grow their assets under management, resulting in them receiving millions of dollars of compensation. In February 2018, during a large spike in market volatility, the Funds suffered more than $1 billion in trading losses, according to the complaint.
The final judgments, to which all defendants consented without admitting or denying the SEC’s allegations, permanently enjoined each of the defendants from violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940; Caine, LJMFM, and Parvataneni from violations of Section 206(4) of the Advisers Act and Rule 206(4)-8 thereunder; LJMFM and Parvataneni from violations of Section 34(b) of the Investment Company Act of 1940; and LJMFM from violations of Section 15(c) of the Investment Company Act and Section 206(4) of the Advisers Act and Rule 206(4)-7 thereunder. The final judgment ordered LJMFM and Caine to pay, jointly and severally, disgorgement of $1,720,317 with prejudgment interest of $699,129; LJM Partners and Caine to pay, jointly and severally, disgorgement of $1,567,713 with prejudgment interest of $637,112; and Parvataneni to pay disgorgement of $512,724 with prejudgment interest of $208,368. The final judgment further ordered Caine to pay a $500,000 civil penalty and Parvataneni to pay a $200,000 civil penalty, and enjoined Caine for three years, and Parvataneni for one year, from managing or advising on securities investments for, or acting as or being associated with an investment adviser to, any third-party, except for their wives and children.
The SEC’s investigation was conducted by Kevin Wisniewski, Jake Schmidt, Marlene Key-Patterson, and Terrance Moran of the SEC’s Chicago Regional Office, under the supervision of Jeffrey Shank. The SEC’s litigation was led by Kevin Wisniewski, Michael Foster, Robert Moye, Jake Schmidt, and Marlene-Key Patterson.