The US Securities and Exchange Commission has brought charges against Albert K.
The US Securities and Exchange Commission has brought charges against Albert K. Hu, a hedge fund manager with ties to Silicon Valley, for falsely claiming that his funds were overseen by experienced attorneys, auditors and other professionals, and for misappropriating investor funds.
As part of its suit, the SEC is seeking an emergency court order to freeze Hu’s assets. Hu, a long-time Bay Area resident, was arrested in Hong Kong on related criminal charges filed by the US Attorney’s office in San Jose.
Since 2001, the complaint alleges, Hu claimed to manage hedge funds known as Asenqua and Fireside. The SEC says that Hu, and entities he controls, lied to investors from the beginning of his scheme.
Hu and the Asenqua hedge funds falsely claimed that several prominent international law firms served as legal counsel for the Asenqua hedge funds. In addition, the defendants identified an individual as ‘chief financial officer’ of the Asenqua hedge funds, when in fact the person had no association with the funds.
Hu forged the signature of the purported chief financial officer in communications with investors, according to the complaint. Further, the defendants provided investors with supposedly independently audited financial statements for two of the funds. In reality, Hu paid for a virtual office with an address in the San Francisco financial district for the ‘independent’ audit firm.
‘By touting the supposed involvement of independent professionals in the oversight of his hedge funds, Hu deceived investors into believing that there were safeguards in place that simply did not exist,’ says Marc J. Fagel, director of the SEC’s San Francisco regional office. ‘The SEC filed an emergency action to preserve whatever investor funds may remain in accounts in the US and abroad.’
According to the SEC’s complaint, Hu raised more than USD5m from investors with connections to Silicon Valley and transferred hundreds of thousands of dollars of investor funds into foreign bank accounts without informing investors. The SEC further alleges that recently Hu has refused investors’ requests for the return of their funds.
The Commission’s complaint, filed in federal district court for the Northern District of California, charges Hu and the entities he controls, Asenqua, Asenqua Capital Management, AQC Asset Management and Fireside Capital Management, with violations of the antifraud provisions of the federal securities laws.
In addition to emergency and interim relief, the SEC seeks a final judgment permanently enjoining the defendants from future violations of the antifraud provisions of the federal securities laws and ordering them to pay financial penalties and disgorgement of ill-gotten gains.
