This content is from: Portfolio

Morning Brief: Three Arrested For Fraud at a Hedge Fund

The founder of Premium Point and two of his employees were charged with fraud in parallel criminal and civil actions.

The founder of a small hedge fund firm and two other employees were arrested and charged with participating in a scheme to commit securities fraud and wire fraud relating to the mismarking of certain securities. Their actions inflated the value of the firm’s hedge funds by more than $200 million at one point, according to the U.S. Attorney’s Office for the Southern District of New York. These actions took place from 2014 through 2016.

The three individuals are Anilesh Ahuja, the founder, chief executive officer, and chief investment officer of New York-based Premium Point Investments, a firm that specialized in structured credit products; Amin Majidi, a former partner and portfolio manager at the firm; and Jeremy Shor, a former trader at the firm. The government also unsealed charges against Ashish Dole, a former chief risk officer and trader at the firm, and Frank Dinucci Jr., a former salesman at a broker-dealer. Dole and Dinucci have pleaded guilty and are cooperating with the government, according to the announcement.

In a parallel action, the Securities and Exchange Commission filed civil charges against Premium Point Investments with inflating the value of private funds it advised by hundreds of millions of dollars as well as against Ahuja, Majidi, and Shor. Premium Point said in a regulatory filing in 2016 that it was winding down. At the time it reported $86 million in regulatory assets. It managed in excess of $5 billion at its peak, according to the government’s complaint.


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