Wordplay trips up multimillion dollar investors
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A missing word has led to the loss of some big bucks by investors, and a highly-displeased Securities and Exchange Commission.
On Tuesday, the SEC charged a New York-based securities professional, Andrew W. Caspersen, with soliciting about $95 million from two institutional investors by offering promissory notes issued by Irving Place III SPV LLC.
The problem was that the Irving Place is only a shell entity formed and controlled by Mr. Caspersen with no legitimate business operations, according to the SEC. Investors were apparently fooled by its similarity in name to Irving Place Capital Partners III SPV LLC, a legitimate private equity fund that was not associated in any way with Mr. Caspersen.
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York announced criminal charges against Mr. Caspersen.
In a statement, the director of the SEC’s New York regional office charged that Mr. Caspersen had engaged in a “brazen fraud” which demonstrates “that even sophisticated institutional investors are not immune to financial scams.
All which apparently goes to show that not only should you always read the small print, but reading the big print carefully is probably a good idea as well.
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