The SEC alleged that IIG sold at around $60 million in fake trade finance loans to clients. The investment advisor’s employee allegedly doctored documentation to substantiate the fake trade finance loans. As a result, clients were deceived to purchasing those loans.
IIG seriously violated its fiduciary duty
In a statement, Daniel Michael, Chief of Complex Financial Instruments Unit at the SEC, said, “This case shows that even sophisticated professional investors can fall victim to Ponzi schemes. The revocation of IIG’s registration is necessary to protect the public in light of IIG’s egregious breaches of its fiduciary duty as an investment adviser.”
In the lawsuit, the SEC stated that IIG violated the Investment Advisers Act of 1940, the Securities Act of 1933, and the Securities Exchange Act of 1934
IIG agreed to a bifurcated settlement under which it is enjoined from committing future violations of the anti-fraud provisions of the federal securities laws.
On November 26, the court entered an order imposing a preliminary freeze on IIG’s assets. However, the court is yet to determine the monetary relief including disgorgement, prejudgment interest, and civil penalties. The SEC needs to submit a motion regarding the matter to the court.
