SEC Charges Joseph Meyer and Hedge Fund Statim Holdings with Defrauding Investors

SEC Charges Joseph Meyer and Hedge Fund Statim Holdings with Defrauding Investors

According to the Securities and Exchange Commission (SEC), dozens of Atlanta families were defrauded out of large, but still undetermined, sums of money by Joseph Meyer and his investment advisory firm Statim Holdings. The investors, members of the close-knit Atlanta Indian community, were all business partners or friends of Meyer and his wife, and they often enjoyed dinner parties, birthday celebrations and trips together.

According to the SEC complaint filed on December 26, 2018, between 2009 and 2018 Meyer solicited investors by offering limited partnership shares in Arjun LP, a private hedge fund. The complaint alleged that Arjun offered investors in one of the four classes of limited partnership interests a feature he called “No Loss Protection”, essentially a guarantee that investors would not lose their money, and he offered guaranteed fixed returns to investors in two other classes.

The SEC alleges that Meyer and Statim Holdings’ wrongful acts included:  Misappropriating most of Arjun’s funds for his personal use, while using complex transactions to mask these “loans”; doctoring financial statements to conceal losses; imposing a 10-year “lock-in” requirement, in which investors would lose half their principal if they withdrew their funds within 10 years, to make it easier to deceive investors about the status of their investments; and using his father-in-law’s bank account to hide information from investors.

Hindsight, Foresight, and Trust

The close business and personal relationships between Meyer and the investors may have quenched doubts about the scheme that probably should have arisen from the very beginning.

Some of the most blatant red flags included:  the No Loss Protection pledge, a promise that seems to fall well within the “too good to be true” category; the ten-year lock-in period; the stellar annual returns on investment that were reported by Arjun; Meyer’s reluctance to release information about the status of the investments; and Meyers’ luxurious lifestyle (attributed by Meyer to an inheritance).

Perhaps none of these factors, taken alone, would justify serious doubts about the legitimacy of the fund. Taken together, however, they probably would have prompted sophisticated investors without strong social relationships with the Meyer family to investigate further. If the SEC allegations turn out to be true, they should serve as a warning to investors to pay more attention to the totality of the circumstances when evaluating an investment.

Speak with an Investment Fraud Attorney Today

Dimond Kaplan & Rothstein, P.A. has vast experience in representing investors who have sustained losses as a result of investment fraud or a Ponzi scheme. We will aggressively pursue claims and fight for your rights.

If you are looking for an investment fraud attorney to review your rights and options, the investment fraud lawyers at Dimond Kaplan & Rothstein, P.A. represent individual and institutional investors who have lost money as a result of investment fraud or stockbroker misconduct. We’ve recovered more than $100 million in assets lost to investment fraud and stockbroker misconduct.

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