Indian-origin CEO sent to jail for securities fraud

An Indian-origin CEO was sentenced to over four years in prison after being convicted of securities fraud for his participation in a scheme to inflate the net asset value for hedge funds managed by the company by over $100 million.

Anilesh Ahuja, 51 was the founder, chief executive officer, and chief investment officer of Premium Point Investments (PPI). He was sentenced to 50 months in prison in connection with his conviction following a jury trial for engaging in a securities mismarking scheme from 2014 to 2016, Attorney for the United States Audrey Strauss said.

The jury had convicted Ahuja and Jeremy Shor, a former trader at PPI, on securities fraud-related offenses relating to their participation in a scheme to inflate the net asset value reported to investors for hedge funds managed by PPI by more than USD 100 million.

Strauss said Ahuja was convicted of participating in a scheme to mismark securities and mislead investors about the true value of the funds that Premium Point managed.

Ahuja conspired with others in his company and corrupt brokers to fraudulently inflate the value of the assets under their management, which in turn allowed them to charge higher fees and avoid redemptions by investors who otherwise would have pulled their money from Premium Point, she said.

“The substantial prison term imposed on Ahuja appropriately holds him accountable for his criminal acts,” Strauss said.

According to the indictment, from about 2014 through 2016, Ahuja and Shor participated in a scheme to defraud PPI's investors and potential investors in hedge funds by deceptively mismarking each month the value of certain securities held in these funds. They fraudulently inflated the net asset value of those funds as reported to investors and potential investors.

The mismarking scheme evolved as a result of demands by Ahuja that PPI maintains its track record of success and keeps pace with the performance of peer funds, regardless of market conditions or the actual performance of the funds.

In addition to the prison term imposed on him, Ahuja was further sentenced to three years of supervised release. Earlier this month, Shor was sentenced to 40 months’ imprisonment and three years of supervised release.