Employees of TCA Fund Management Group girded their whistle-blower report filing with the Securities and Exchange Commission by going to the media with accusations that the Florida-based firm has inflated both its earnings and assets for years.

According to the whistle-blowers, the TCA Fund Management Group, which conducts its American operations out of its Aventura, Fla., headquarters, has $300 million in assets, not $500 million, and is earning 1.92% a year, not 7% to 8% as the company claimed in investor communications.

The firm has inflated its main hedge fund’s assets and returns since 2017, according to three employees who filed the whistle-blower complaint with the SEC and also leaked the story to NBC News.

The TCA Fund Management Group’s Global Credit Master Fund, which lends money to small and midsize companies in distress, has failed to book losses on defaulted loans and recorded fee revenues it has not received, the employees said.

Domiciled in the Cayman Islands, the TCA hedge fund is aimed at wealthy investors who can afford its $100,000 minimum.

Bloomberg Law reported Wednesday that in a letter to investors, TCA said that the Global Credit Master Fund had “received redemption and withdrawal requests in excess” of available cash and that it planned to liquidate the fund amid an ongoing SEC investigation. The SEC did not respond to a request for comment.

TCA’s attorney, Carl Schoeppl, said in a statement: “TCA Fund Management Group Corp. treats this matter very seriously and has taken immediate steps to address the SEC whistle-blower complaint by launching an internal investigation into the known allegations to determine the truth and has been in contact with the SEC and has offered full cooperation since first becoming aware of the complaint.”

Because fund managers typically are paid as a percentage of the assets they oversee, padding returns can be a lucrative temptation. After a decade-long bull market in stocks, the drive to attract investor money only increases the temptation to inflate returns.

The TCA fund reported consistent annual gains of 7% to 8% in recent years. The fund has operated since 2011.

If TCA accounted for its holdings properly, its assets under management would total only about $300 million, the employees allege. Of those assets, only $60 million are performing loans, the TCA employees have told the SEC. Those holdings generate just 1.92% annually, not the 7% to 8% reported to TCA investors, the filing stated.

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