SEC Charges Fund Principal for Role in Misrepresentations of Fund's Track Record

ADMINISTRATIVE PROCEEDING
File No. 3-22214

September 27, 2024 - The Securities and Exchange Commission today announced settled charges against Evan H. Katz, a principal of the Crawford Ventures Absolute Return Fund (the "Fund"), for misrepresentations made to prospective investors concerning the Fund manager's prior track record in trading foreign currencies. The Fund raised more than $16 million from investors in 2022 and 2023.

According to the SEC's order, in marketing communications and offering materials which Katz used to solicit investors, the Fund claimed it would employ a successful trading strategy previously used by Katz's partners, brothers Akshay and Dev Kamboj, for other clients prior to the Fund's formation. The order finds that, as proof of the purported success of the strategy, some prospective investors were provided with an "Audit Report" and a "Performance Audit" purportedly issued by an Australian audit and consulting firm. In reality, as set forth in the order, the Australian auditor had never performed any audit work for the Kamboj brothers, and the Audit Report and the Performance Audit were fake. According to the order, the Kamboj brothers created a fake email address in order to impersonate the auditor in communications with potential investors.

While the Kamboj brothers did not tell Katz about the forgeries, the order finds that Katz failed to take reasonable steps to confirm the legitimacy of the Kamboj brothers' purported trading track record before using that track record to solicit investors. According to the order, Katz also failed to take reasonable steps to ensure the accuracy of representations concerning third party accolades of the Fund.

Without admitting or denying the findings in the SEC's order, Katz consented to an Order finding that he violated Securities Act Sections 17(a)(2) and (3); ordering him to cease-and-desist from committing or causing any violations and any future violations of those provisions; and ordering him to pay disgorgement of $98,542.97 plus $5,397.83 in prejudgment interest, a civil penalty of $98,542.97.

Also today the SEC filed a Complaint against the Kamboj brothers in the United States District Court for the Southern District of New York charging them with violations of Securities Act Section 17(a) and Exchange Act Section 10(b) and Rule 10b-5 thereunder for defrauding prospective Fund investors.

The investigation was conducted by Nicholas Flath, Rhonda L. Jung, Melissa Coppola, Ling Yu, Alistaire Bambach, and Adam Grace, under the supervision of Sheldon L. Pollock of the New York Regional Office. An SEC examination was conducted by Allison Erlenwein, Merryl Hoffman, John Bulla, and George DeAngelis.

The SEC appreciates the assistance of the Australian Securities and Investments Commission, the Seychelles Financial Services Authority, the Swiss Financial Market Supervisory Authority, and the Cayman Islands Monetary Authority.