U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23837 / May 22, 2017
Securities and Exchange Commission v. Murakami, et al., Civil Action No. 1:17-CV-10928 (D.Mass. filed May 22, 2017)
Hedge Fund Manager Charged With Making Ponzi Payments, Defrauding Investors
The Securities and Exchange Commission today charged a Massachusetts-based hedge fund manager with making Ponzi-like payments and taking investor funds to pay for personal travel, meals, and credit card bills.
The SEC’s complaint alleges that Yasuna Murakami misappropriated more than $8 million for business and personal expenses and made approximately $1.3 million in Ponzi-like payments to earlier investors as purported investment gains.
Murakami’s business partner Avi Chiat also is charged in the SEC’s complaint. Chiat allegedly helped Murakami raise money from investors while providing fabricated account statements that grossly overstated investment performance while investors were losing millions of dollars due to unprofitable trading and Murakami’s misappropriation of funds.
In a parallel criminal action, the U.S. Attorney’s Office for the District of Massachusetts charged Murakami with one count of wire fraud.
The SEC’s complaint, filed in the U.S. District Court for the District of Massachusetts, charges Murakami, Chiat, and their Cambridge-based investment advisory businesses MC2 Capital Management, LLC and MC2 Canada Capital Management, LLC with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8. The complaint also charges Murakami and Chiat with aiding and abetting MC2 Capital Management, LLC’s and MC2 Canada Capital Management, LLC’s violations of the Investment Advisers Act. The complaint seeks disgorgement of ill-gotten monetary gains plus interest, penalties, permanent injunctions, and orders prohibiting Murakami and Chiat from purchasing and selling securities other than for their own accounts. MC2 Capital Partners, LLC, MC2 Capital Value Partners, LLC, and MC2 Capital Canadian Opportunities Fund, LLC, are named as relief defendants in the complaint, and the SEC seeks disgorgement from them of amounts equal to the amount of investor funds they received plus interest.
The SEC’s case is being handled by Colin Forbes, Patrick Noone, David Scheffler, Marty Healey, and Celia Moore of the Boston Regional Office. The SEC appreciates the assistance of the FBI and the U.S. Attorney’s Office for District of Massachusetts.