The Securities and Exchange Commission (SEC) has initiated securities fraud charges against Craig Allen for misleading investors in The Cheetah Fund L.P., an Atlanta-based hedge fund he founded and managed. This announcement underscores the ongoing risks investors face and highlights the importance of investor recovery strategies.
From January 2019 to January 2023, Allen reportedly solicited approximately $9.9 million from investors by misrepresenting the hedge fund’s performance. Contrary to his claims of outstanding returns, the SEC’s complaint reveals that Allen and a related company, C.M. Allen, experienced over $4.59 million in trading losses. Additionally, Allen is accused of deceiving investors about the fund’s auditing practices, falsely claiming that a renowned accounting firm prepared the fund’s financial statements and tax documents.
Despite these significant losses, Allen allegedly drew at least $2.64 million in compensation based on the fund’s purported performance. This was in direct contradiction to the fund’s policy of compensating management only for actual profits earned. To date, Allen has returned only about $900,000 to investors, leading to substantial financial losses totaling around $9 million.
In response to these allegations, the SEC is seeking comprehensive sanctions, including a permanent injunction, disgorgement of ill-gotten gains with interest, civil penalties, and a strict prohibition against Allen holding any officer or director position in any public company. Furthermore, the SEC aims to permanently bar Allen from engaging in any activities related to the issuance and trading of securities, except for personal account transactions.
For investors affected by such securities fraud, firms specializing in securities arbitration, like Bakhtiari & Harrison, offer critical legal support. These firms play a pivotal role in helping defrauded investors recover their losses through the arbitration process, providing a path to financial restitution and justice. Engaging with experienced securities arbitration attorneys can significantly enhance an investor’s chances of recovering funds lost due to fraudulent investment schemes.