The Securities and Exchange Commissioned has obtained an emergency court order to shut down a Beverly Hills, Calif., hedge fund and wealth management business that allegedly used lies and religious messages to try to lure clients.
The SEC alleges that IU Group Inc., its principal Elijah Bang, and its salesperson, Daniel Lee, targeted retirees and claimed on Web sites to have been founded by "devoted Christians who believe in God, Jesus Christ, and the Holy Spirit."
The firm targeted retirees, university professors and members of the Christian community, but was apparently unsuccessful in gaining any clients before it was shut down, according to the SEC.
"Bang and Lee made flagrant misrepresentations in their attempt to lure retirees and others into entrusting their money to them," said Rosalind R. Tyson, director of the SEC's Los Angeles Regional Office.
According to the SEC's complaint, filed in Federal District court in Los Angeles, Bang and Lee made numerous false representations to potential hedge fund investors and wealth management clients, including the following statements:
The hedge fund was operational and had a successful performance history since January 2007.
The majority of IU Wealth's clients are professional athletes, actors, producers, doctors, professors, politicians, and executives of private corporations.
IU Wealth has over $800 million under management.
Bang and Lee solicited potential investors and wealth management clients using various company names and Web sites, including IU Wealth Management LLC and Icon Capital Management LLC. Lee also tried to find potential investors and clients using "cold call" e-mail solicitations.
IU Group's business license was suspended by California, and IU Wealth and Icon Capital are not companies of record in California, according to the SEC.