FUND EXEC LIED ABOUT COLLEGE DEGREE AND RISK CONTROLS!

SEC v. Naufal Sanaullah — U.S. Securities and Exchange Commission Litigation Release No. 26227, dated January 17, 2025.

The SEC charged Naufal Sanaullah, a former executive at EIA All Weather Alpha Fund, with misleading investors about the fund's risk management and his own educational background. Sanaullah allegedly claimed the fund had controls it lacked and misrepresented his college graduation. He has consented to an injunction and an officer-and-director bar, with disgorgement, interest, and penalties to be determined.

In Plain English

Imagine you're investing in a special savings account. The person in charge told you it had strong safety rules and that they were a super-smart college graduate. But, they lied. The safety rules weren't really there, and they never finished college. The government stepped in to stop this and make them pay back what they took.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Misrepresenting Risk Management From at least December 2017 through October 2021, Naufal Sanaullah allegedly told investors and prospective investors that the EIA All Weather Alpha Fund had risk management controls in place. However, the SEC complaint alleges that these controls were not actually being followed.
2. Falsifying Educational Background During the same period, Sanaullah also misrepresented his educational background to investors. He claimed to have graduated from college, specifically the University of Michigan, when in fact he had not completed his college education.
3. Soliciting Investments While making these false statements, Sanaullah actively solicited new investors and encouraged current investors to put more money into the Fund. This occurred during the 'Relevant Period' from at least December 2017 through October 2021.
4. Disseminating False Information Sanaullah either made these false statements directly during calls and emails or directed others at EIA to disseminate misleading information about the Fund's risk management and his own credentials.
5. Knowledge of Falsehoods The SEC's complaint alleges that Sanaullah knew the represented risk control protocols were not being followed and that he had not graduated from college during the time he was making these claims.

The Enforcement Action

On January 17, 2025, the SEC charged Naufal Sanaullah with making and disseminating false and misleading statements to investors and prospective investors about the Fund’s risk management practices and his educational background. The SEC previously filed a complaint against EIA and its CEO, Andrew M. Middlebrooks, in May 2022, alleging deceit, misuse of investor funds, and misappropriation. The action against Sanaullah, filed in the U.S. District Court for the Eastern District of Michigan, seeks permanent injunctive relief, disgorgement with prejudgment interest, civil penalties, and an officer-and-director bar. Sanaullah has consented to the entry of an order imposing injunctive relief and an officer-and-director bar, with the court to determine disgorgement, interest, and penalties at a later date.

Named in this action: Naufal Sanaullah.

Original SEC litigation release ↗ · Browse all cases