Bloomberg reports that according to sources, the US Securities and Exchange Commission has launched a probe into Statim Holdings. Inc., an Atlanta, Georgia-based financial firm, after the latter told investors in its main hedge fund that there was no risk of financial losses for investing. The regulator’s investigation comes in the wake of a state probe by the Georgia Securities Division. Statim is helmed by Joseph A. Meyer.
Meyer told investors in the Arjun fund’s main share class that they would never sustain financial losses. However, they have to commit their funds for a decade or lose 50% of their principal should they decide for early redemption.
The hedge fund manger has said that he uses a computerized system that he designed and he invests the bulk of clients’ funds in Treasury bonds. In 2015 Bloomberg News placed Arjun at number eight in its list of hedge funds that had assets ranging from $250M and $1B. BarclaysHedge has given 17 awards to Arjun.
In an email to Bloomberg, a lawyer representing Statim and Meyer maintains that his clients have not been accused of wrongdoing and that they did not act improperly. Attorney Steve Sadow described the investigation of Statim, Arjun, and Meyer as “routine.”
However, a number of former Statim investors have said that they took their money back after finding discrepancies in investment statements and their contracts. They claim that activity in their accounts wasn’t in alignment with the performance that Meyer was touting. The firm claimed yearly returns of 13%, 24%, and in 2013, of 91%.
Some of the investors accused Meyer of being difficult to reach, unfriendly even, after they requested their funds back. They claim that it was only after they threatened to take legal action that the firm gave back all or some of their money.
Georgia regulators began looking into Statim after the firm did not agree to a surprise audit. According to Brian Kemp, Georgia’s Secretary of State, he found “multiple irregularities” involving Arjun and Statim.
The outcome of both probes are still pending.
At The SSEK Partners Group, our securities fraud law firm represents clients seeking to recover their losses. Contact us today to ask for your free case consultation.
Below is a list of some of the signs of possible investment fraud:
- The promise of high returns in a short time period.
- The guarantee that there is no (or low) risk involved with investing.
- High-pressure sales tactics, along with the demand that you must invest now.
- A broker claiming to have “insider” knowledge, secret methods, or special contacts that allow for successful investing.
- Claims that new technology or unverifiable formulas are part of the investment strategy.
- Investment strategies that are explained using sophisticated words that are hard to understand.
- There is no memorandum or prospectus to go with the investment.
- An investment that cannot be confirmed through a state regulator, the SEC, or NASD.
- A financial representative who is not registered or one that claims to be registered yet is not listed with the state or a federal regulator.
SEC Said to Probe Hedge Fund That Promises No Losses, Bloomberg, April 17, 2017
Securities/ Investments, Georgia.gov