The SEC charged an SEC-registered investment adviser with engaging in a scheme to inflate the value of securities held by several private investment funds.
The SEC and the U.S. Attorney's Office for the Southern District of New York launched parallel investigations into Premium Point Investments LP ("Premium Point"). The SEC Complaint alleged that Premium Point obtained inflated quotes on securities from a brokerage firm in exchange for directing securities trades to the broker. Premium Point also allegedly inflated the value of securities by using "imputed" mid-point prices of securities without disclosing this practice to investors. The SEC asserts that Premium Point inflated the value of securities in an attempt to hide poor fund performance from potential and current investors.
The U.S. Attorney's Office for the Southern District of New York also filed an indictment against Premium Point's CEO, a former partner and portfolio manager, and a former trader.
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