The US Securities and Exchange Commission (SEC), has announced fraud charges against Detroit-based EIA All Weather Alpha Fund Partners I LLC (EIA). According to the regulator, the company and its owner, RIA Andrew Middlebrooks, were involved in an alleged multilayer Ponzi scheme. The accused were involved in the misappropriation of nearly $39 million in investor funds.
The SEC has already asked the US District Court in the Eastern District of Michigan for a temporary restraining order against Middlebrooks and EAI. The request also includes the freeze of their assets and the naming of relief defendants.
The Offenders Misappropriated Investors’ Funds
The alleged offense occurred between June 2017 and April 2022. According to the US regulator, EIA and Middlebrooks deceived investors by making false statements about the scheme, its performance, and total assets. The filing also noted that they provided false investor account statements to deceive the gullible investors, who believed that the scheme was genuine.
Additionally, they created and released a bogus audit opinion, and well as misrepresented that the fund had an auditor. These actions were taken to deceive the investors and take their money from them.
The SEC Acted Swiftly To Protect Investors From Future Losses
The filing also noted that Middlebrooks misappropriated investor funds from the personal user, which included payments for credit cards and jewelry.
Additionally, the regulator charged Middlebrooks for aiding and abetting the EAI’s violations of the Investment Advisers Act. Following their offenses, Middlebrooks and EIA are sued for injunctions.
The company and its operators lured investors to believe that the firm is making massive gains from investments. After fraud, they also conceived the truth, preventing the investors and law enforcement agencies from finding out the truth on time.
The SEC said its quick action against the offenders is intended to protect investors from future harm.
Co-Chief of the Asset Management Unit of the US SEC, Dabney O’Riordan, stated that the regulator will continue acting to offer more protection against fraudulent activities in the market. The goal is to protect investors and make the market less risky.