International Investment Group, New York-Based Investment Adviser, Has Registration Revoked

The SEC revoked the registration of International Investment Group after allegations over alleged fraud.

The Sonn Law Group is investigating allegations that International Investment Group committed misconduct. If you or a family member has suffered losses investing, we want to discuss your case. Please contact us today for a free review of your case.

Sonn Law Brokerage firm International Investment GroupThe SEC is alleging that International Investment Group (“IIG”) sold in excess of $60 million in fake loan assets. This is what led to the revocation of IIG’s registration. The SEC charged IIG with securities fraud for hiding losses in its flagship hedge fund and selling in excess of $60 billion in fake loan assets to clients.

According to the complaint, IIG allegedly overvalued defaulted loans in the fund’s portfolio to hide losses in its flagship fund and altered its records to show that the defaulted loans had been repaid and the proceeds had been used to create new loans. On the contrary, the loans had not been repaid and the new loans were fake.

The SEC also alleges that IIG raised money to meet investor redemption requests and other liabilities by selling over $60 million in fake trade finance loans to other customers. An IIG employee allegedly had fake documentation created to substantiate the non-existent loans in order to trick clients into purchasing the loans, including fake promissory notes and a forged credit agreement. 

IIG specializes in trade-finance lending to small and medium-sized companies in emerging markets. It is the investment adviser to private investment funds the Trade Opportunities Fund (TOF), the Global Trade Finance Fund (GTFF), and the Structured Trade Finance Fund (STFF).

Beginning around 2007, IIG allegedly engaged in a practice of hiding losses in the TOF portfolio by overvaluing troubled loans and replacing defaulted loans with fake performing loan assets. When it was necessary to create liquidity, including meeting redemption requests, IIG would sell the overvalued and/or fictitious loans to new investors, including to GTFF and STFF. It would use the proceeds to generate the necessary liquidity required to pay off earlier investors.

“This case shows that even sophisticated professional investors can fall victim to Ponzi schemes,” Daniel Michael, chief of the SEC’s Complex Financial Instruments Unit, said in a statement. “The revocation of IIG’s registration is necessary to protect the public in light of IIG’s egregious breaches of its fiduciary duty as an investment adviser.”

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The Sonn Law Group is currently investigating allegations of misconduct. We represent investors in claims against negligent brokers and brokerage firms. If you or your loved one experienced investment losses, we are here to help. For a free consultation, please call us now at 866-827-3202 or complete our contact form.