SEC Charges Atlanta-Based Hedge Fund Manager with Multimillion-Dollar Fraud

The Securities and Exchange Commission today announced charges against Craig Allen for defrauding investors in The Cheetah Fund L.P., an Atlanta-based hedge fund that Allen founded and controlled.

According to the SEC’s complaint, during the period between January 2019 and January 2023, Allen raised approximately $9.9 million from investors in the Cheetah Fund by lying about the fund’s supposedly superlative performance. In reality, the SEC states, Allen incurred over $4.59 million of realized trading losses in the accounts of the Cheetah Fund and of C.M. Allen, a related company also controlled by Allen. The complaint also states that Allen falsely indicated to investors that the Cheetah Fund used a specific accounting firm as an auditor and to prepare its Schedule K-1 tax forms. Allen’s compensation from the Cheetah Fund for managing its portfolio, according to the SEC, was performance-based, meaning that Allen was to be compensated only when the fund profited. But the complaint alleges that, despite incurring heavy trading losses and thus earning little if any legitimate compensation, Allen received at least $2.64 million from the Cheetah Fund and its investors. The SEC claims that, to date, Allen has returned only about $900,000 to Cheetah Fund investors, resulting in investor losses of approximately $9 million.

Source: SEC Charges Atlanta-Based Hedge Fund Manager with Multimillion-Dollar Fraud