New York Attorney General Eric Schneiderman has issued a statement announcing the conviction of Mazzam Ifzal Malik, also known as Mark Malik, on 28 criminal charges that involved him stealing over $800,000 from investors. According to the state, the hedge fund manager set up fake hedge funds so he could take investors’ money.
During cold calls to investors in the United States and abroad, Malik claimed that he had extensive experience on Wall Street, including having managed over $5 billion in assets. Schneiderman, however, said that the 33-year-old only had been a financial consulting trainee. He also was a registered broker but for just two years.
Malik’s real job experience involved working as a traffic agent, waiter, and security guard.
Yet with this lack of experience, from ’11-’15 Malik managed the following bogus hedge funds:
• Wall Street Creative Partners • Wolf Hedge LLC.
• American Bridge Investments L.P.
• Seven Sages Capital, L.P.
To get the press to cover these funds, Malik created fake documents and used forged audits. Financial websites such as Barclay Hedge and Bloomberg even listed a couple of the funds and their purported success. Barclay Hedge awarded American Bridge the “yearly performance award” and ranked it as the top performing equity long-short fund holding more than $100 million in assets.
Investors received fake earning statements, while accounts that he claimed held millions of dollars never contained above approximately $90,000. According to evidence, Malik promised investors a partnership interest in his hedge funds. He also created false offering memoranda and marketing collateral. At least seven investors lost money because of his scam.
Malik, who is scheduled for sentencing later this month, could serve up to 20 years behind bars.
It was just earlier this year that the SEC filed civil charges against Malik. The regulator said that he promised investors consistently high returns. When investors asked for their money back Malik delayed most of their requests or refused outright. He even allegedly made up a fictitious employee. “Amanda Ebert” was given the title “Investor Relations, Wolf Hedge LLC.
Malik is accused of taking a photo of the real Amanda Ebert and including it in e-emails she supposedly sent, including one notifying an investor of his “death.” The Commission said that the real Ebert does not know Malik and she never gave him permission to use her image.
Read the SEC Complaint (PDF)