U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22994 / May 16, 2014
Securities and Exchange Commission v. Vineet Kalucha et al., Civil Action No. 14 CV 3247 (RMB) (S.D.N.Y.)
Court Extends Asset Freeze and Temporary Restraining Order
The Securities and Exchange Commission announced that, on May 12, 2014, the Honorable Richard M. Berman, United States District Court Judge for the Southern District of New York, entered, at the request of the parties, an order extending until July 10, 2014 the order freezing assets, temporary restraining order, and granting other relief that the Court had entered on May 5, 2014. The Court further scheduled a hearing on July 10, 2014 to determine whether the Court should enter a preliminary injunction extending the asset freeze and other relief previously granted by the Court.
On May 5, 2014, the Securities and Exchange Commission filed fraud charges and sought emergency relief against Aphelion Fund Management, LLC (Aphelion), Aphelion's chief investment officer, Vineet Kalucha, and Aphelion's chief financial officer, George Palathinkal. The SEC's complaint alleges that Kalucha fraudulently altered an outside audit firm's report reviewing the performance of an investment account he managed, that Palathinkal allegedly learned about Kalucha's falsifications, which essentially changed an investment loss into a major investment gain in the account, and that nevertheless the falsified report showing the phony gain instead of the actual loss was distributed to prospective investors. The complaint further alleges that investors were separately provided false information about Aphelion's assets under management and Kalucha's litigation history, and that Kalucha allegedly siphoned investor proceeds for his luxury car payments and settlements of legal actions against him personally that are unrelated to Aphelion.
For further information, please see Litigation Release Number LR-22988 (May 9, 2014).