Ponzi Scheme Award of the Year Goes to This Man
Welcome to America! You Can’t Make This Stuff Up
America is the land of opportunity. Pakistani citizen and New York resident, Moazzam “Mark” Malik worked as a waiter, and NYPD traffic agent, and a security guard.
After “working” at Lehman Brothers, JP Morgan Chase and Merrill Lynch, since 2002. Mark Malik manages more than $1 billion. However, Mark Malik never worked at Lehman Brothers, JP Morgan Chase or Merrill Lynch. In fact, Malik got his first securities related job as a stockbroker “trainee,” in December 2007. He was accused of fraud, and was terminated.
Prior to 2007, when Malik was supposedly working at JP Morgan Chase and Merrill Lynch, he was really a waiter at the Max Brenner Chocolate Bar and Restaurant.
Malik’s Ponzi Scheme Begins
So what does Malik do after being fired as a trainee, he starts a hedge fund. Malik invents Wall Street Creative Partners, Seven Sages Capital, LP, American Bridge Investment Group, LLC, and Wolf Hedge, LLC.
Malik hires cold callers to use a script to solicit investors, apparently from a list. He creates fake web sites, fake e-mail addresses, fake glossy fact sheets, and generally fake everything, purporting that his hedge fund is a “privately held Global Investment Management firm dedicated to the individuals and institutions around the world, with approximately $100 million in assets under management” and offices at 40 Wall Street, New York, New York.
In fact, Malik and his fund’s only assets consisted of a bank account containing approximately $60,000. So Malik invented a fictitious accounting firm, Berkowitz & Associates, in Iselin, New Jersey, and then created a series of audited financial statements, by the accounting firm attesting that Malik’s hedge fund had $100.26 million in funds under management.
While he was creating fictitious audited financial statements, he also created fictitious rates of return on these financial statements showing a 325.21% return since inception in 2009, with positive returns every month including a 92.73% percent return on investment in just 2012 alone.
Malik then gives these bogus financial statements to Barclay Hedge and Bloomberg, where his funds and their performance are listed, and in fact, in 2011, Bloomberg identifies Malik as a “rising fund manager.”
Malik then touts to prospective investors that he has been bestowed with the title of 3rd top rising manager in US fund management and that his fund has been consistently recognized by Bloomberg as the No.1 Best performing hedge fund in 2010 and Barclay Hedge as No.1 ranked for compound annual return in 2012.
The Lies Continue as Malik Robs Investers
In fact, as of 2012, his fund’s brokerage account held only $269.52.
Malik even invents people. He uses a picture of a woman on the internet and creates “Amanda Ebert,” as the director of Investor Relations, to communicate with investors as disseminate false information about his fund.
Instead, from the money he raised, Malik withdrew $447,226.53 in cash, and used these funds to pay personal expenses including vacation travel, restaurant dining, and liquor, jewelry, furniture and rugs, and tuition to attend courses at the Harvard Extension School. While Malik was studying at Harvard, he also used investor money to move temporarily to Haverhill, Massachusetts, enjoy spa and health club visits, and maintain a subscription to a matrimonial matching website.
When investors start to become suspicious because he will not honor their redemption requests, Malik tells investors that he decided to take his company public to create investment opportunities in other investment firms and to expand internationally. According to Malik, KPMG was on board as the fund’s auditors, and the fund, through such underwriters as Credit Suisse, JP Morgan, Barclays, and Merrill Lynch, would be issuing 100 million shares at $10 per share, or $1 billion, which would be listed the New York Stock Exchange
When at least investor wanted his money back, Malik created the identity of another person, named “Courtney,” that Malik was dead, and “passed away with the heart attack after [an] accident.”
U.S. Securities & Exchange Commission Charges Malik
On February 13, 2015, the United States Securities & Exchange Commission charged 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.
Guiliano Law Group
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