Malik claimed to operate a hedge fund with $100M in assets, and raised $840,774 doing so, but the fund never held more than $90,177 in assets. The difference being what Malik used for his own personal needs. He then avoided investors, refused redemption requests, sent emails out claiming his death, and created a fictitious person named “Amanda Ebert” as his Investor Relations liaison.
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 is seeking a temporary restraining order with the complaint in order to freeze Malik's assets. To read the full complaint as filed click here.