The Securities and Exchange Commission charged co-founder and chief investment officer of International Investment Group LLC (IIG) David Hu with fraud for his involvement in a $60 million Ponzi-like scheme.
The US regulator filled a complaint in federal district court in Manhattan which alleges that from Cotber 2013, Hu arranged and managed fraudulent activities with investment advisory clients of IIG. The SEC claims that Hu grossly overvalued the assets in IIG’s flagship hedge fund and as a result, the fund payed inflated fees to IIG.
The SEC alleges that through his company IIG, Hu sold around $60 million in fake trade finance loans to other investors and used the profit to pay the redemption requests of earlier investors and other liabilities. The complaint also claims that Hu mislead IIG clients to purchase these loans by directing others at IIG to create and give to the clients fake loan documentation to justify the non-existent loans, including fake promissory notes and a forged credit agreement.
