U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23324 / August 20, 2015
Securities and Exchange Commission v. Iftikar Ahmed, et al., Civil Action No. 3:15-cv-00675-JBA (D. Conn.)
SEC Obtains a Preliminary Injunction Order, Including Asset Freeze, Against Connecticut-Based Investment Professional Behind $65 Million Fraud
The Securities and Exchange Commission today announced that it has obtained a preliminary injunction freezing assets of Iftikar Ahmed, an investment professional charged with a 10-year running fraud at the venture capital firm where he previously was employed, Connecticut-based Oak Investment Partners. The Commission also obtained an asset freeze against all relief defendants, including Ahmed's wife.
The SEC filed its emergency action against Ahmed in May and alleged that he obtained approximately $65 million in ill-gotten gains. On May 7, 2015, the court imposed a temporary restraining order on Ahmed imposing an asset freeze on him, prohibiting the destruction of evidence, and permitting expedited discovery. On August 12, 2015, the Honorable Janet Bond Arterton of the U.S. District Court for the District of Connecticut issued an order granting the SEC's motion for a preliminary injunction continuing the asset freeze up to approximately $118 million in order to preserve funds in the event that Ahmed is ordered to pay disgorgement, prejudgment interest, and civil penalties. The order will remain in effect until a final disposition of the case.
The SEC alleges that Ahmed used a variety of fraudulent devices to perpetrate his scheme and generate illicit profits in connection with numerous securities transactions on which he advised Oak and the Oak funds. Among other things, Ahmed overstated the prices of investments in companies that he presented to Oak, including by altering deal documents, and pocketed the difference for himself. Ahmed also used fictitious invoices for purported expenses related to Oak's investment in various companies, which he caused Oak or the companies to pay and, again, pocketed the profits. Ahmed attempted to conceal his fraud by directing that Oak and the companies make payments to bank accounts that Ahmed claimed belonged to the counterparty to the deals, but which in fact Ahmed secretly owned and controlled. After directing his ill-gotten profits into these accounts, Ahmed subsequently transferred those funds into accounts held in his name and the names of family members and other related entities.
The SEC alleges that Ahmed violated the federal antifraud laws and related SEC antifraud rules and seeks a final judgment ordering Ahmed to pay penalties, return allegedly ill-gotten gains with prejudgment interest, and be subject to permanent injunctions from future violations of the antifraud laws. Numerous individuals and entities, including Ahmed's wife and entities that Ahmed allegedly controls, have been named as relief defendants for the purpose of preserving assets for any ultimate recovery.
The SEC's investigation was conducted by Jeffrey E. Oraker and Jay A. Scoggins of the Market Abuse Unit in the Denver Regional Office. The case has been supervised by Joseph G. Sansone, Acting Co-Chief of the SEC Enforcement Division's Market Abuse Unit. Nicholas P. Heinke and Mark L. Williams of the Denver Regional Office will lead the SEC's litigation, which will be supervised by Gregory A. Kasper, Regional Trial Counsel. The SEC appreciates the assistance of the U.S. Attorney's Office for the District of Massachusetts, the U.S. Attorney's Office for the District of Connecticut, and the Federal Bureau of Investigation.
For further information, please see Litigation Release No. 23260 (May 13, 2015).