Mass Ave Global Inc. (MassAve) and its co-founder and CEO, Winston M. Feng, have been charged with misleading investors.
The Securities and Exchange Commission has charged the investment advisors with making false and misleading statements and manipulating investment data, a breach of trust with profound implications.
Mass Ave Global charged
A United States governmental watchdog scrutinized MassAve’s flagship opportunity fund after a series of red flags were raised in the company’s correspondence with investors.
From 2020 to 2022, the SEC found that the investment advisor’s flagship opportunity fund holdings and exposures were subject to incorrect summation.
False and misleading statements about investment opportunities led to investors’ losses. The SEC also accused Feng of modifying portfolio data to give an unjust representation of the opportunity fund.
He included the altered information in the monthly tear sheets, summary portfolio snapshots, and top 10 position lists sent out in investor correspondence.
Mass Ave operates an extensive portfolio in Asia, and the SEC found that the company did not alert investors of a conflict of interest from late 2022 to early 2023. The company’s Co-Founder was operating a hedge fund in China without the proper due diligence being applied to alert investors.
Osman Nawaz, Chief of the SEC Enforcement Division’s Complex Financial Instruments Unit, said, “Complete and accurate reporting at all turns, whether in investor communications or about conflicts of interest, is vital to investor protection. We will continue to hold individuals accountable for falling short in making such disclosures.”
Mass Ave pays the price
The SEC has found that the wrongdoing has breached the Investment Advisers Act of 1940’s antifraud and compliance provisions. The SEC said, “MassAve and Feng consented to the entry of the SEC’s orders requiring them to cease and desist from further violations, censuring MassAve, and imposing the penalties listed above.”
Mass Ave has agreed to pay $350,000, with Feng contributing a civil penalty of $250,000. Feng will also be suspended for twelve months from work in the investment advisory industry and temporarily removed as chief investment officer and portfolio manager.
Image: Ideogram.
