The SEC alleges that Moazzam 'Mark' Malik falsely claimed to be operating a hedge fund with approximately $100 million in assets under management, and he solicited investors with promises of consistently high returns. Although he raised $840,774 from investors, his fund never made real investments and never held more than $90,177 in assets as Malik continually withdrew the cash and spent it as his own. Despite repeated demands from investors for the return of their money, Malik has flatly refused or delayed the bulk of their redemption requests. He allegedly went so far as to create a fictitious fund employee who sent one investor an e-mail claiming that Malik had died.
'By pretending to be a successful hedge fund manager, Malik conned investors into bankrolling his lavish lifestyle,' said Andrew M. Calamari, Director of the SEC’s New York Regional Office. 'Besides luxury travel, dining, and jewelry, investor funds paid for Malik’s continuing education courses at Harvard and his subscription to a matrimonial matching website.'
According to the SEC’s complaint filed in U.S. District Court for the Southern District of New York, Malik has been continuing to solicit investors amid the redemption requests. His fund has changed its name several times since he created it in 2010. Malik initially called it Wall Street Creative Partners before changing it to Seven Sages Capital LP and then American Bridge Investment Group LLC. Most recently it has been known as Wolf Hedge LLC. Malik described his fund as 'a privately held Global Investment Management firm dedicated to the individuals and institutions around the world.'
The SEC alleges that Malik created a fictitious 'Amanda Ebert' who was identified with a title of 'Investor Relations, Wolf Hedge LLC' in e-mail communications with several investors. Malik included in the e-mails a purported photograph of Ebert that he copied off the Internet. The real-life woman in the photo does not know Malik and never authorized the use of her image in the e-mails.
The SEC’s complaint charges Malik and his fund with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The complaint also charges Malik with violations of Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8. The SEC seeks a temporary restraining order to freeze the assets of Malik and his fund and prohibit them from committing further violations of the federal securities laws. The SEC seeks a final judgment ordering them to disgorge their ill-gotten gains plus prejudgment interest and penalties.
The SEC’s investigation is continuing.