Monday, March 28, 2016

Securities Professional Charged With Defrauding Institutional Investors

Seal of the U.S. Securities and Exchange Commi...
The Securities and Exchange Commission today charged a New York-based securities professional with defrauding two institutions he solicited to invest in a shell company he controlled whose name was deceptively similar to that of a legitimate private equity fund.

According to the SEC complaint filed in federal district court in Manhattan, Andrew W.W. Caspersen, a New York City resident, solicited approximately $95 million from two institutional investors by offering promissory notes issued by Irving Place III SPV LLC. 

The complaint alleges that Irving Place III SPV LLC is a shell entity formed and controlled by Caspersen with no legitimate business operations, unlike the similarly named Irving Place Capital Partners III SPV, a legitimate private equity fund not associated in any way with Caspersen.
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Caspersen.

“As alleged, Caspersen engaged in a brazen fraud by raising money under false pretenses and simply stealing the funds,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.  “This action amply demonstrates that even sophisticated institutional investors are not immune to financial scams.”

The SEC complaint also alleges that:

·         Caspersen obtained a $25 million investment in November 2015 from an institutional investor by falsely representing that the investment would be secured by approximately $900 million of assets of Irving Place Capital Partners III SPV.
·         Shortly after the investor wired its $25 million investment to Irving Place III SPV LLC’s bank account, Caspersen simply took control of the funds for his personal use.
·         Using similar false and misleading statements, Caspersen later solicited an additional $20 million from the first investor and $50 million from a second, in both cases unsuccessfully.
The SEC is seeking a permanent injunction, return of allegedly ill-gotten gains with interest, and monetary penalties.

SEC Press Release

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