Shor approached brokers eager for business from Premium Point and asked them to provide sham prices and spreads on mortgage-backed bonds the fund held, according to prosecutors.
Ahuja co-founded Premium Point in 2008 after leaving Deutsche Bank AG, where he had headed global residential mortgage-bond trading. The fund began amassing the distressed bonds after the global credit crisis, managing about $2 billion of assets at its peak.
Premium Point begun winding down in September 2016 after posting large losses. It revealed in 2017 the Securities and Exchange Commission was probing its valuations, and the criminal probe emerged in a separate mismarking case brought by federal prosecutors in Connecticut against three former Nomura Holdings Inc. traders.
Lawyers for Shor and Ahuja said the valuations were within appropriate ranges and investors and third parties were aware of their methods. Shor’s attorneys said Ahuja was solely responsible for determining valuations at Premium Point.
This article was provided by Bloomberg News.