A Yale student who allegedly duped investors out of millions with a fraudulent hedge fund is now barred from the industry
- Omar Zaki, 21, ran a hedge fund from his room at Yale University that misled investors, according to an SEC filing.
- The graduate, from New York, claimed his fund relied on an algorithm to manage funds of $3 million. The SEC says none of that was true.
- A filing said Zaki "repeatedly misled investors in the Fund about assets under management, fund performance, and fund management."
- Zaki, who did not admit or deny the SEC's findings, did not immediately reply to a request for comment.
Student days are usually spent studying hard or partying hard; but in the case of Omar Zaki his college days were spent allegedly defrauding investors.
So says the Securities and Exchange Commission (SEC) which has fined the former Yale student $25,000, to be paid in installments over three years.
Zaki made false claims about performance, trading strategy, and the size of his fund, according to a filing by the SEC.
The graduate, a 21-year-old from New York, claimed his fund relied on an algorithm to manage funds of $3 million. The SEC says he did not actually use an algorithm, and did not manage $3 million.
Between January 2017 and February 2018 Zaki raised $1.7 million from investors touting a fund which had 80% returns in the biotech space in a portfolio. The fund claimed to have a trading history from December 2016 to April 2017 but in fact did not commence trading until June 2017, the SEC said.
Zaki managed to effectively dupe 11 investors into investing $1.7 million during his time at the Ivy League institution, but the SEC filing says the grad is now unemployed.
He will be barred from the investment industry for three years as part of the SEC's ruling. Zaki did not admit or deny its findings.
Zaki did not immediately reply to a request for comment on LinkedIn. Zaki's lawyer did not respond to emailed requests for comment.