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Matthias Knab, Opalesque: The Securities and Exchange Commission (SEC) has censured accounting firm EisnerAmper LLP for conducting a deficient audit of the Infinity Q Diversified Alpha Fund (the "Mutual Fund") for the fiscal year ended August 31, 2020 - an audit that failed to detect a scheme that inflated the fund's net asset values by hundreds of millions of dollars.
The SEC order, dated March 6, 2026, found that EisnerAmper violated Rule 2-02(b)(1) of Regulation S-X by falsely representing in its audit report that the engagement was conducted in accordance with Public Company Accounting Oversight Board (PCAOB) standards.
The Infinity Q Fraud
Infinity Q Capital Management served as investment adviser to the Mutual Fund and used Bloomberg LP's Evaluated Pricing Solutions (BVAL) to value its derivative positions - primarily variance swaps and corridor variance swaps tied to measures of market volatility. Infinity Q told investors and auditors that BVAL priced these instruments independently, without any input from the firm.
In reality, Infinity Q's founder and chief investment officer, James Velissaris, was systematically manipulating BVAL's valuation models. He entered incorrect values that did not match counterparty term sheets, selected improper valuation models, and cherry-picked key inputs - all to inflate the Infinity Q Funds' reported performance.
Velissaris pleaded guilty to one count of securities fraud...................... To view our full article Click here
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