US SEC Stops Alleged $39 Million Fraud by Hedge Fund Adviser

On Wednesday, the US Securities and Exchange Commission (SEC Securities and Exchange Commission (SEC) The Securities and Exchange Commission (SEC) is one of the most widely known independent authorities in the United States. The SEC has a wide range of responsibilities, helping police markets and curbing against abuse. This includes enforcing federal securities laws, proposing securities rules, and regulating the US’ stock and options exchanges.As one of the paramount regulatory authorities in the US, the SEC is responsible for the oversight of public companies in the aforementioned segments.Wha The Securities and Exchange Commission (SEC) is one of the most widely known independent authorities in the United States. The SEC has a wide range of responsibilities, helping police markets and curbing against abuse. This includes enforcing federal securities laws, proposing securities rules, and regulating the US’ stock and options exchanges.As one of the paramount regulatory authorities in the US, the SEC is responsible for the oversight of public companies in the aforementioned segments.Wha Read this Term) said that it had filed fraud charges against EIA All Weather Alpha Fund I Partners LLC and its owner, Andrew M. Middlebrooks, for allegedly engaging in a multi-year scheme that included the misappropriation and misuse of investors’ funds.

On 19 May, the SEC requested, and the US District Court in the Eastern District of Michigan granted emergency relief from the court, including a temporary restraining order against EIA and Middlebrooks and an asset freeze against the defendants and named relief defendants.

Case Background

From at least mid-2017 to April 2022, according to the SEC’s unsealed complaint, EIA and Middlebrooks misled investors in their hedge fund, EIA All Weather Alpha Fund I LP, by making false statements about the fund’s performance and total assets, providing false investor account statements, misrepresenting that the fund had an auditor, as well as creating and disseminating a fake audit opinion.

Additionally, the SEC’s complaint alleges that EIA and Middlebrooks misused new investor money to make Ponzi-like payments Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonl Read this Term to other investors in order to deceive investors into believing that the fund was profitable. According to the complaint, Middlebrooks misappropriated investor funds for personal use, including payments for jewellery and credit cards.

Moreover, Middlebrooks is charged in the SEC’s complaint, which was filed in the Eastern District of Michigan, with aiding and abetting EIA’s violations of the Investment Advisers Act. EIA and Middlebrooks are being sued by the SEC for injunctions, disgorgement of ill-gotten gains with prejudgment interest and financial penalties.

“As we allege in the complaint, Middlebrooks lured investors by touting extraordinary performance returns and then concealed the truth of his fraud, including by fabricating documents provided to investors. Our swift action is intended to protect investors from future harm,” C. Dabney O’Riordan, the Co-Chief of the Asset Management Unit at the US SEC, commented.