Former Private Equity Firm Partner Charged With Secretly Billing Clients for His Vacations and Salon Visits
Litigation Release No. 24093 / April 4, 2018
Securities and Exchange Commission v. Mohammed Ali Rashid, No. 1:17-cv-8223-PKC (S.D.N.Y. filed Oct. 25, 2017)
On October 25, 2017, the Securities and Exchange Commission charged Mohammed Ali Rashid, a former senior partner at Apollo Management L.P., with defrauding his fund clients by secretly billing them for approximately $290,000 in personal expenditures, including his family vacations, visits to a hair salon, and purchases of designer clothing and high-end electronics.
The SEC's complaint alleges that Rashid falsely claimed that certain individuals accompanied him to dinners to make it appear various personal expenses had a business purpose, and he doctored a receipt in an effort to justify his purchase of a $3,500 suit for his father as a business expense.
According to the SEC's complaint, despite being caught by the firm and told to stop on two occasions in 2010 and 2012, Rashid continued to expense personal items to clients into 2013. After he was confronted about his expenses for a third time, Rashid admitted that he charged approximately $220,000 in personal expenses. A forensic accountant then uncovered additional personal expenses that Rashid improperly charged to clients.
The SEC's complaint alleges that Rashid violated, and in the alternative aided and abetted violations of, Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and seeks penalties and injunctive relief.