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U.S. Securities and Exchange Commission


Litigation Release No. 23596 / July 15, 2016

Securities and Exchange Commission v. Vineet Kalucha et al., Civil Action No. 14 CV 3247 (RMB) (S.D.N.Y.)

Investment Fund Manager Sentenced to Fifteen Months in Federal Prison for Obstructing SEC Investigation

A defendant in a SEC enforcement action was sentenced to fifteen months in prison in a parallel criminal case after pleading guilty to charges that he obstructed justice in an investigation conducted by the SEC. Vineet Kalucha, whose sentence was handed down on July 14, will also be placed on supervisory release for 24 months upon completing his prison term.

On May 5, 2014, the SEC filed fraud charges in federal district court against Kalucha, Aphelion Fund Management LLC ("Aphelion"), an unregistered investment advisor Kalucha controlled, and Aphelion's chief financial officer. The SEC's complaint alleged that Kalucha fraudulently altered an outside audit firm's report reviewing the performance of an investment account that Kalucha managed, essentially changing an investment loss into a major investment gain in the account. The complaint further alleged that investors were separately provided false information about Aphelion's assets under management and Kalucha's litigation history, and that Kalucha allegedly siphoned investor funds for his luxury car payments and settlements of legal actions against him personally that are unrelated to Aphelion.

According to a criminal information filed by the U.S. Attorney for the District of Columbia in November 2015, in U.S. v. Vineet Kalucha, No. 1:15-cr-00169-RMC (November 16, 2015), Kalucha provided false investigative testimony to the SEC on Feb. 25, 2014, during the investigation that led to the SEC's action. Among other things, he testified that he had entered into a written promissory note for "about $350,000" with Aphelion. Knowing that no such note existed, Kalucha then had loan documents prepared, signed them, falsely dated them more than one year before the date they were actually signed, and provided them to the SEC. In February 2016, Kalucha pled guilty to obstruction of justice.

For further information, please see Litigation Release Number LR-22988 (May 9, 2014) [SEC Announces Charges and Asset Freeze Against Hedge Fund Advisory Firm Distributing Falsified Performance Results] and Litigation Release Number LR-22994 (May 16, 2014) [Court Extends Asset Freeze and Temporary Restraining Order]; Release Number 34-75667 (August 11,2015) [Order Instituting Administrative Proceedings, Making Findings and Imposing Remedial Sanctions]



Modified: 07/15/2016