An Indian-origin entrepreneur already facing insider trading charges, has been charged by federal regulator Securities and Exchange Commission (SEC) with fraud at a venture capital firm where he was employed.
Ahmed, 43, a graduate of the Indian Institute of Technology in New Delhi and Harvard Business School, was last month charged with insider trading in relation to the 2013 proposed acquisition of American company Cooper Tire and Rubber by India's Apollo Tyres.
In a separate complaint unsealed yesterday in US District Court in Connecticut, the SEC alleges that Ahmed illegally profited by having funds managed by the firm Oak Investment Partners pay inflated prices for e-commerce investments.
The complaint alleges that Ahmed transferred approximately USD 27.5 million in illegal profits to accounts under his control at the expense of investors in the Oak funds, including public pension investors.
The Harvard Business School graduate had Oak funds pay USD 20 million for a USD 2 million stake in an Asian e-commerce joint venture in December 2014, pocketing the USD 18 million difference for himself.
In another investment in August 2014, an Oak fund overpaid for shares in a China-based e-commerce company, allowing Ahmed to pocket USD 2 million.
The SEC's complaint charges Ahmed with violating federal antifraud laws and related SEC antifraud rules.
The SEC is seeking a preliminary injunction to continue the freeze of Ahmed's assets and seeks to have Ahmed return his allegedly ill-gotten gains with interest and pay civil monetary penalties.
The emergency court order obtained by the SEC freezes up to USD 55 million of Ahmed's assets, prohibits him from destroying evidence and orders expedited discovery.
In charges filed against him last month in the Cooper Tire case, the SEC alleged that Ahmed's friend Amit Kanodia had tipped him and another friend prior to the acquisition announcement after learning of the deal from his wife, then the general counsel at Apollo who was intimately involved in Apollo's efforts to acquire Cooper Tire.
