The Securities and Exchange Commission has charged Iftikar Ahmed, a Greenwich, Connecticut investment professional with fraudulently diverting more than $64 millions from the venture capital funds he advised.
The SEC’s complaint alleges that Ahmed illegally profited by having funds managed by Oak Investment Partners pay inflated prices for two e-commerce investments and by failing to disclose his beneficial interest in a company that the fund transacted with. The complaint alleges that Ahmed transferred approximately $27.5 million in illegal profits to accounts under his control at the expense of investors in the Oak funds.
According to the SEC’s complaint, Ahmed had Oak funds pay $20 million for a $2 million stake in an Asian e-commerce joint venture in December 2014, pocketing the $18 million difference for himself. It alleges that in another investment in August 2014, an Oak fund overpaid for shares in a China-based e-commerce company, allowing Ahmed to pocket $2 million. In a third transaction, the complaint alleges that in 2013, Ahmed advised an Oak fund to invest $25 million in a U.S.-based e-commerce company without disclosing his interest in I-Cubed Domains LLC, which had a significant stake in the same company. Additionally, in 2014, at Ahmed’s advice, the Oak fund paid $7.5 million to I-Cubed to buy shares in the company that I-Cubed had acquired for $2 million.
“Ahmed again failed to disclose his ties to I-Cubed, violating his duty to act in the best interest of the Oak fund investors and avoid self-dealing,” said the SEC.
According to the SEC’s complaint, the defendant has violated certain federal antifraud laws and related SEC antifraud rules. The SEC’s complaint seeks a preliminary injunction to have Ahmed pay civil monetary penalties and return his allegedly ill-gotten gains with interest.