The Securities and Exchange Commission on Friday charged Bahamas-based brokerage firm Alliance Investment Management Limited (AIM) and its president Julian R. Brown for enabling a fraud that was halted when the SEC charged the hedge fund manager at the center of the scheme.
The SEC alleges that Brown and his firm purported to be the "custodian" for assets under the management of Nikolai Battoo. The SEC obtained a court-ordered freeze over Battoo’s assets after charging him in 2012 with defrauding investors around the world by hiding major losses while falsely boasting that their investments were performing remarkably during the financial crisis.
"We allege that Brown and his firm enabled Battoo’s scheme by providing investors with false assurances about who was holding their money and how much money they had in their accounts," said Timothy Warren, associate director of the SEC’s Chicago Regional Office.
According to the SEC’s complaint against Brown and AIM in federal court in Chicago, they misrepresented themselves to investors as Battoo’s custodian when, since at least 2009, their firm did not have custody of most of the assets listed on investor account statements.
Brown and AIM were accused of allowing Battoo to create false account statements on AIM letterhead that vastly overstated the value of investors’ assets by more ......................