Infinity Q Alpha Mutual Fund Settles Charges

SEC Orders Infinity Q Diversified Alpha Mutual Fund to Return Funds to Harmed Investors 

According to a litigation release posted on November 10, on the Securities and Exchange Commission has settled charges against the Infinity Q Diversified Alpha Mutual Fund for allegedly mispricing its net asset value, or “NAV,” as part of a massive overvaluation scheme. The agency is seeking the return of remaining funds to harmed investors. 

From at least February 2017 through February 2021, the mutual fund’s reported NAVs were allegedly materially and falsely inflated due to a mismarking scheme conducted by the Chief Investment Officer (CIO) of Infinity Q Capital Management, LLC, the investment adviser to the mutual fund, according to the complaint. The SEC previously charged the Chief Investment Officer was previously charged by the SEC for this conduct 

Infinity Q’s founder allegedly marketed the mutual fund as a way for retail investors to access investment strategies typically reserved for high-net-worth clients, while instead “he offered fraudulent documents, altered performance results, and manipulated valuations,” according to the SEC’s Division of Enforcement.    

The SEC further alleges that the executive tried to hide his scheme, by creating backdated minutes of valuation meetings that never occurred and altering documents that described Infinity Q’s valuation policies. He also purportedly sent forged term sheets to the auditor of the mutual fund and the private fund, according to the complaint.   

By allegedly hiding the actual performance of the funds, the CIO prevented redemptions by investors after the volatile markets due to COVID-19 pandemic. According to the complaint, during the pandemic, the funds’ actual values were reportedly half of what investors were told.   

On February 22, 2021, Infinity Q and the mutual fund’s board reportedly filed an application to suspend redemptions in the mutual fund. After the mutual fund was liquidated it reportedly distributed approximately $670 million to current shareholders, with approximately $570 million remaining to be distributed to harmed investors. 

The mutual fund has agreed to settle the charges and consent to the appointment of the Special Master to oversee expenses paid from the mutual fund and to administer a process to return the remaining funds to harmed investors. The settlement, and the appointment of the Special Master, are subject to court approval. To learn more about the investigation, please see: 

Infinity Q Capital Management Founder Charged with Massive Fraud    

Filing a Complaint against your Brokerage Firm 

Brokers have a fiduciary duty to make investment recommendations that are consistent with the clients’ net worth, investment experience and objectives. Risk tolerance, age, and liquidity needs also need to be considered.  

When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration. 

FINRA operates the largest securities dispute resolution forum in the United States, and has extensive experience in providing a fair, efficient and effective venue to handle a securities-related dispute. 

 Free Consultation with a National Securities Attorney   

If you have suffered investment losses in Infinity Q Diversified Alpha Mutual Fund, the securities attorneys at the White Law Group may be able to help you. For a free consultation, please call the offices at 888-637-5510.     

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Seattle, Washington.     

For more information on The White Law Group please visit http://whitesecuritieslaw.com.