On February 12, 2015, the U.S. Securities and Exchange Commission (“SEC”) filed an emergency enforcement action to halt, what according to the complaint, has been an ongoing fraud perpetrated by Moazzam “Mark” Malik and Wolf Hedge. Malik, a Pakistani citizen and New York City resident, is the hedge fund manager of Wolf Hedge. The fund has changed its name several times since Malik created it in 2010, from initially being called Wall Street Creative Partners to Seven Sages Capital LP then American Bridge Investment Group LLC and most recently to Wolf Hedge LLC. According to SEC papers, Malik described his fund as “a privately held Global Investment Management firm dedicated to the individuals and institutions around the world.”
According to the complaint filed by the SEC, Malik and Wolf Hedge falsely claimed to be operating a hedge fund with approximately $100 million in assets under management. In reality, Malik did solicited investors with the promises of consistently high returns and was able to raise $840,774 from investors, however, according to the SEC, his fund never made real investments and never held more than $90,177 in assets. The SEC believes Malik and Wolf Hedge stole investor money and have been using it for Malik’s personal benefit including spending it on “a matrimonial matching website,” “continuing education courses at Harvard,” and “luxury travel, dining and jewelry.” In fact, when investors did make demands for the return of their money, Malik flatly refused or delayed the bulk of their redemption requests, according to the SEC complaint. Malik even went as far as to create a fake investor relations employee named ” Amanda Ebert” for Wolf Hedge and sent emails of her photo to several investors, however according to the SEC complaint, Malik emailed photos of a real-life woman that does not know Malik and never authorized the use of her image in the emails. And it does not end there, also according to the complaint, Malik also created another fictitious employee named “Courtney” who told an investor in September of 2013 that ” Mr. Malik has been (sic) passed away with the heart attack after accident. We will dissolve the fund shortly.” Additionally, after changing the funds name to Wolf Hedge, Malik allegedly threatened an investor by sending a werewolf video and with the comment from Malik stating “that’s what I think I am.”
The SEC complaint charged Malik and American Bridge d/b/a Wolf Hedge 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 thereunder, and 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 thereunder.
The SEC sought and received a temporary restraining order to freeze Malik’s and fund’s assets. The SEC is now seeking a final judgment ordering them to disgorge their ill-gotten gains plus prejudgment interest and pay financial penalties.
Media photo from MarkMalik.com
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