|
|
Matthias Knab, Opalesque for New Managers:
On June 3, 2026, the Securities and Exchange Commission issued an order denying Evan H. Katz's motion to vacate the settled order he agreed to in September 2024. The 2024 order related to forged audit materials that were distributed to prospective investors in the Crawford Ventures Absolute Return Fund. The Commission held that a settlement is final and that what it called "settlor's remorse" is not a basis to undo one.
Because this case has generated strong reactions on all sides, this article sets out what the SEC actually found, what it did not find, and Mr. Katz's own position, drawing on the SEC orders and on the statement Mr. Katz provided through his representatives in September 2024.
What the SEC found - and what it did not
The settled order of September 27, 2024 was brought under Sections 17(a)(2) and 17(a)(3) of the Securities Act. As a matter of law, those provisions do not require scienter - that is, they do not require intentional or knowing wrongdoing; negligence is sufficient. The SEC found that Mr. Katz provided forged audit materials to prospective investors and failed to take reasonable steps to confirm their legitimacy, and that he should have done so given his lack of currency-trading experience, his lack of any prior relationship with the two brothers who managed the strategy, and his own misgivings about their candor.
Importantly, the SEC did not allege that Mr. Katz forged any document, fabricated the track record, or knew that the materials were forged. On the contrary, the order states that the Kamboj brothers - Akshay Kamboj and Dev Kamboj - "did not tell Katz that they had forged these documents and, instead, took steps to hide the forgery." The Commission also expressly stated that it had "considered remedial acts promptly undertaken" by Mr. Katz to protect the equity interests of the fund's investors, and noted that he had arranged for the fund to retain a large U.S. law firm to prepare its formation and offering documents.
The scienter-based allegations - the willful forging of an audit and the impersonation of an auditor - were brought by the SEC against the Kamboj brothers separately. As to the fund itself, the SEC's filings state that the trading profits reflected in the historical materials were fictitious and that investors suffered aggregate net losses of approximately $4.1 million; the fund had raised more than $16 million from 45 investors.
Katz's position
In a statement provided to Opalesque in September 2024, Mr. Katz said that he had fully cooperated with the SEC and that he deeply regretted that he too, in addition to the fund's large global auditors and national law firm, had not detected the fraud committed by the Kamboj brothers. He emphasised that, as the SEC's own order notes, the brothers concealed their forgery from him, and that the SEC has charged the brothers with willfully forging an audit and impersonating an auditor. Mr. Katz further stated that since early 2024 he has worked to return investors' funds and has voluntarily waived his management fees for 2025 and 2026, and that the SEC expressly credited the remedial steps he took after learning of the fraud. Opalesque was unable to independently verify each of these assertions, but they are reflected in, and consistent with, the public SEC record cited above.
In another statement provided to Opalesque in July 2026, Katz added that "in recognition of all the diverse efforts mentioned above I've made on behalf of the fund and its investors - and even though each of them has lost money in the fund - numerous fund investors have sent signed letters of support to the SEC, in which the fund investors state and confirm that I have always acted appropriately and in the best possible interest of the fund and its investors, that I've never done anything wrong, and that therefore I should not be sanctioned in connection with the audit fraud and the fraud committed by the Kamboj brothers."
"In particular, when I learned of the brothers' audit fraud, I then single-handedly uncovered the Kamboj brothers' attempts to open a secret, unauthorized bank account in the name of Crawford Ventures - through which they could have diverted and embezzled all of the fund's assets and all investor funds in the fund - and successfully helped thwart these attempts."
"To best protect the fund and its investors, I also had engaged, in particular, renowned external experts, including a global "Big Four" accounting firm, several major international and national law firms (including several highly prestigious "AmLaw 100" firms), a global fund administrator with more than one trillion U.S. dollars in assets under management, as well as other specialized and highly regarded service providers."
Opalesque was unable to independently verify these further assertions. The investor letters in the SEC case file are available only in redacted form, and the materials provided regarding the engagement of service providers name those providers but do not themselves establish who retained them or in what capacity. These statements are therefore presented as Mr. Katz's own account.
Why the motion to vacate was denied
Mr. Katz had asked the Commission to vacate the order on the theory that it "represents one of the last matters from a prior enforcement regime," pointing to the SEC's recent voluntary dismissals of certain unrelated civil actions. The Commission was not persuaded, holding that voluntary dismissals in unrelated matters are "neither a change in law nor a factual development" that would render a settlement unworkable or contrary to the public interest. It cited a January 2026 federal decision, SEC v. Mango Labs, in which a court rejected the same argument, and noted that vacating settlements on such grounds would leave it "inundated with similar requests from settling respondents." The Commission added that, by consenting to the order, Mr. Katz had forfeited the ability to relitigate its findings - a procedural ruling, rather than a fresh finding on the merits of his account.
The sanctions and the payment plan
The settled order imposed a cease-and-desist order, a civil money penalty of $98,542.97, and disgorgement and interest of $103,940.80. After the monetary sanctions were not paid, the Division of Enforcement obtained a judgment in the Eastern District of New York in April 2025, and in August 2025 the parties agreed to an informal payment plan under which Mr. Katz is to make monthly payments through August 2026. That sequence is a matter of record in the Commission's order.
A recurring question around the marketing
For readers following the longer arc, this is the same Evan Katz who, fifteen years earlier, marketed the AJW funds of Corey Ribotsky's NIR Group. As reported at the time by The Wall Street Journal, Mr. Katz wrote to investors in October 2008 touting "large positive absolute returns" shortly before the funds barred withdrawals; the SEC later charged Ribotsky and NIR with defrauding investors. Mr. Katz was not himself charged in that matter.
What draws continued scrutiny is the marketing. In December 2023, as the Crawford fund was heading toward wind-down, Mr. Katz was still promoting it with figures such as "CAGR +50%/year, Sharpe >2, Sortino >4." More recently, he has been promoting a fund to prospective investors with the claim of "+86% per year CAGR, Sharpe about 2, Sortino about 3." Opalesque has not verified these figures, and presents them as marketing claims rather than audited results. The point for readers is a narrow one: where a manager's earlier marketed performance was found by the SEC to rest on fictitious numbers, comparable eye-catching figures in later marketing warrant independent verification before any reliance is placed on them.
"Since 2003" - a discrepancy worth noting
Mr. Katz's current firm, Benoni Capital, Inc., is a January 2025 rebrand of Crawford Ventures. The Benoni homepage states: "Since 2003, Benoni has helped compelling hedge and private equity funds grow and prosper." That phrasing sits in tension with two other public records: Mr. Katz's own founder biography on the same website describes his having "worked on Wall Street for more than a decade," and FINRA's BrokerCheck (CRD# 5848403) dates his entry into the securities industry to 2013. BrokerCheck also shows that his most recent broker-dealer registration, with Stonehaven, LLC, ended in October 2024, and that he currently holds no broker-dealer registration. None of this bears on the Kamboj matter; it is noted because a firm's own founding-date and tenure claims are something prospective investors are entitled to weigh.
The takeaway for investors
The June 3 order confirms a narrow but important proposition: the SEC will not vacate a final, consented-to settlement simply because the enforcement climate has shifted. Beyond that, the case is a reminder that the burden of verification ultimately sits with the investor. Run the BrokerCheck. Check the CRD. Ask who audits a fund, and then confirm directly with the named auditor that the engagement exists - the absence of exactly that step is what the SEC's negligence findings turned on. Those precautions protect investors regardless of where fault for any particular fraud ultimately lies.
Editor's Note (July 2026): This article has been updated to align its wording more closely with the terminology used in the underlying SEC documents and to include Mr. Katz's previously submitted position concerning the SEC proceedings, including the SEC's findings that the Kamboj brothers concealed their forgery from him and that the Commission credited his remedial acts. These editorial revisions do not alter the factual chronology described in the article.
|
RSS
