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NY AG sues private equity manager over false claims and bad investments

Friday, December 06, 2019

Bailey McCann, Opalesque New York:

New York Attorney General Letitia James is suing Laurence G. Allen and the various corporate entities he controls for defrauding investors and misappropriating more than $13 million to enrich himself and his companies between 2008 and 2018. The complaint - filed in New York County State Supreme Court - alleges repeated and ongoing violations of New York's Martin Act.

Allen manages a private equity fund known as ACP based in Rye Brook, NY. ACP launched in 2004 as a private equity fund of funds. Investors were told that ACP would identify investment targets through - among other avenues - a small broker-dealer, which Allen also controlled through his company NYPPEX Holdings. The complaint alleges that when NYPPEX ran into trouble, Allen began funneling investor money from ACP into NYPPEX and, in turn, into his own pockets.

Between 2008 and 2018, Allen invested approximately $5.7 million of ACP's assets into NYPPEX, while during the same period pocketing that exact same amount in NYPPEX salary.

The lawsuit claims that none of the investments made through NYPPEX were made with the intention of ever generating a return.

Beyond the investments in NYPPEX, the lawsuit states that Allen engaged in a number of additional schemes to improperly divert investor funds from ACP, including misappropriating $3.4 million in carried interest and ......................

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