INVESTORS: Ramas Capital Management, LLC and owner Ganesh Betanabhatla were charged by the SEC with fraud.
The SEC filed charges against Ramas Capital Management, LLC and its owner, managing partner, and chief investment officer Ganesh Betanabhatla for alleged misrepresentations and breaches of fiduciary duty to a privately-managed fund and its sole investor.
The SEC’s complaint against Ramas and Ganesh alleges that while acting as investment advisers to a private investment fund they formed, Ramas and Betanabhatla made various misrepresentations and misused the fund assets. In particular, the complaint alleges that the defendants falsely told the sole fund investor that they had already raised $25 million for the fund, that a well-known and respected energy investor identified by name was involved in the fund and supported the investment, and that the fund was a special purpose vehicle solely set up to invest in a specific portfolio company. The complaint alleges that, in fact, there were no other investors in the fund, the respected energy investor was not involved, and, after receiving the investor’s $1 million, the defendants did not make any investment in the portfolio company and instead transferred most of that money to a completely different portfolio company related to one of Ramas’ earlier private investment funds.
The SEC also alleges that Ruiz misappropriated or misused about $6.5 million of investor funds, a portion of which he spent on various personal expenditures. While Ruiz’s sales team received at least $5.3 million, and Ruiz directly received another $292,000, in commission payments from MJ Capital for promoting these investments.
The SEC’s complaint charges Ramas and Betanabhatla with violating the anti-fraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder. The complaint seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against each defendant.
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