PORTLAND — The Securities and Exchange Commission filed fraud charges Thursday against a Portland man accused of running a Ponzi scheme that raised more than $37 million.
The SEC alleges that Yusaf Jawed, 44, of Grifphon Asset Management, falsely boasted of double-digit returns to lure more than 100 people to invest their money in hedge funds he managed. He then used money to pay off earlier investors and pay for his personal expenses and travel.
The complaint filed in federal court in Portland claims little of the money was invested. Jawed, who previously worked a stockbroker, allegedly created phony assets and sent bogus account statements to investors.
"Jawed presented himself as a sophisticated and successful hedge fund manager when all the while he was brazenly stealing his investors' money," said Marc J. Fagel of the SEC's San Francisco regional office.
Jawed's attorney did not return a message left with his office Thursday.
In its civil action, the SEC seeks financial penalties against Jawed and the return of any ill-gotten gains. It also wants him to be barred from working in the securities industry.
Separately, the SEC accused Jawed's former business partner, Lyman J. Bruhn of Vancouver, Wash., of running a Ponzi scheme with his firms, Sasquatch Asset Management and Pearl Asset Management. The complaint says Bruhn started Sasquatch in the late 1990s as a hedge fund that traded in public securities, but his trading resulted in huge losses in 2000. "As a result, Bruhn ceased operating a legitimate hedge fund business, but instead began using new investor funds to pay off old investors," the SEC said.
The SEC also accused Portland attorney Jacques Nichols, 75, of aiding in Jawed's scheme when it started to collapse. Jawed allegedly promised investors that an independent party — QFF Securities — would pay tens of millions of dollars for Grifphon assets, ensuring they would get their money.
Nichols presented himself to investors as an officer of the firm and told them the firm would buy the assets.
"In truth, QFF Securities was a sham entity," the complaint states.