SEC Charges Securities Professional With Defrauding Institutional Investors
The SEC has charged a New York-based securities professional with defrauding two institutions he solicited to invest in a shell company he controlled.
The U.S. Securities and Exchange Commission (SEC) recently charged a New York-based securities professional with defrauding two institutions he solicited to invest in a shell company he controlled. The shell company also had a name that was deceptively similar to that of a legitimate private equity fund.
According to the SEC, Andrew W.W. Caspersen, a New York City resident, solicited roughly $95 million from two institutional investors by offering promissory notes issued by Irving Place III SPV.
The agency alleges that Irving Place III SPV is a shell entity formed and controlled by Caspersen with no legitimate business operations, unlike the similarly named Irving Place Capital Partners III SPV, a legitimate private equity fund not associated in any way with Caspersen.
Andrew M. Calamari, director of the SEC’s New York Regional Office, commented:
As alleged, Caspersen engaged in a brazen fraud by raising money under false pretenses and simply stealing the funds. This action amply demonstrates that even sophisticated institutional investors are not immune to financial scams.
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The SEC also alleges that:
- Caspersen obtained a $25 million investment in November 2015 from an institutional investor by falsely representing that the investment would be secured by approximately $900 million of assets of Irving Place Capital Partners III SPV.
- Shortly after the investor wired its $25 million investment to Irving Place III SPV LLC’s bank account, Caspersen simply took control of the funds for his personal use.
- Using similar false and misleading statements, Caspersen later solicited an additional $20 million from the first investor and $50 million from a second, in both cases unsuccessfully.
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York has announced criminal charges against Caspersen.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
