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SEC files fraud charges, asset freeze against Aphelion Fund for false results

Thursday, May 08, 2014

Komfie Manalo, Opalesque Asia:

The Securities and Exchange Commission filed fraud charges and an asset freeze against New York-based investment advisory firm Aphelion Fund Management and two of its executives for allegedly distributing falsified performance results to prospective investors in two hedge funds they managed.

The SEC accused Aphelion Fund’s chief investment officer Vineet Kalucha of fraudulently altering an outside audit firm’s report reviewing the performance of an investment account he managed. Aphelion’s chief financial officer George Palathinkal allegedly learned about Kalucha’s falsifications, which essentially changed an investment loss into a major investment gain in the account.

SEC said the falsified report showing the phony gain instead of the actual loss was distributed to prospective investors. Furthermore, investors were separately provided false information about Aphelion’s assets under management and Kolucha’s litigation history.

"We allege that on multiple occasions, Aphelion, Kalucha, and Palathinkal intentionally overstated the success of their investment strategy," said Robert J. Burson, associate director of the SEC’s Chicago Regional Office. "Kalucha also has been using investor money as his own, and emergency action was necessary to protect the interests of investors."

Kalucha, who is majority owner and ma......................

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