Omar Zaki: Yale grad and alleged hedge fund fraudster fined $25K after convincing unsuspecting investors to part with millions of dollars in spectacular get rich scheme.
A Yale graduate is alleged to have bilked just on a dozen investors out of millions of dollars after running a hedge fund scam while enrolled at the ivy league school.
Omar Zaki, now 21, who was supposed to be studying at the school – instead pretended to run the unregistered hedge fund, managing to convince 11 investors to pool their money with him.
The gilded ivy leaguer ‘future master of the universe’ persuaded them to part with their cash by telling them how his firm relied on an algorithm that had produced incredible returns, sometimes as much as an unbelievable 114 per cent over a period of a decade.
The scheme was uncovered after a pair of investors — who were considering financing an offshore fund with Zaki — asked to verify the fund’s bank and brokerage account balances directly with the custodians according to CBS News.
Even during the best years, the stock market rarely generates returns of more than 10 per cent annually.
The Securities and Exchange Commission allege that Zaki’s claims were complete lies: that his fund never used such an algorithm, that he misled investors about how much money it managed and then deliberately wrongly reported returns in excess of 80 percent between December 2016 until March 2017.
Zaki is also alleged to have told investors how he managed between $2 and $5 million but had only raised $1.7 million in assets from 11 individuals between January 2017 and February 2018.
Zaki, who graduated from Yale last year with a bachelor’s degree in economics and physics, has not admitted nor denied the allegations made by the SEC findings, however he has agreed to pay a $25,000 fine the dailymail reported.
The SEC has since allowed the fraudster to pay in installments of around $2,083.33 a month over three years because he is a recent college graduate and now finds himself unemployed.
As part of the SEC settlement, Zaki has also agreed not to work as an investment adviser for at least three years.