The U.S. Securities and Exchange Commission has announced charges against Mohammed Ali Rashid, a former senior partner at Apollo Management L.P., for defrauding his fund clients by secretly billing them for approximately $290,000 in personal expenditures. Mr. Rashid is charged with using client funds for family vacations, visits to a hair salon, and purchases of designer clothing and high-end electronics.
The SEC’s complaint alleges that Mr. Rashid falsely claimed that certain individuals accompanied him to dinners to make it appear various personal expenses had a business purpose, and he doctored a receipt in an effort to justify his purchase of a $3,500 suit for his father as a business expense.
“As alleged in our complaint, despite earning millions of dollars, Rashid used client money to fund his lifestyle and personal expenses, including family vacations, designer clothing, and spa services. Rashid knew what he was doing was wrong because he took active steps to conceal his misconduct,” said Anthony Kelly, Co-Chief of the SEC Enforcement Division’s Asset Management Unit.
According to the SEC’s complaint, despite being caught by the firm and told to stop on two occasions in 2010 and 2012, Mr. Rashid continued to expense personal items to clients into 2013. After he was confronted about his expenses for a third time, Mr. Rashid admitted that he charged approximately $220,000 in personal expenses. A forensic accountant then uncovered additional personal expenses that Mr. Rashid improperly charged to clients.
The SEC’s complaint alleges that Rashid violated, and in the alternative aided and abetted violations of, Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.