SEC Charges New York Man With $95M Institutional Investor Fraud

The U.S. Securities and Exchange Commission is charging Andrew W.W. Caspersen and shell entity Irving Place III SPV, LLC with defrauding two institutional investors, including a non-profit charitable affiliate of an investment limited partnership. Caspersen is a securities professional associated with a registered brokerage firm. He also is one of the sons of deceased financier Finn Caspersen. According to the SEC, Caspersen offered the two clients promissory notes that were issued by the shell entity, which he controlled. However, Irving Place III SPV, LLC lacked any business operations that were legitimate.

The regulator contends that the New York securities professional obtained $25M from an institutional client last November by falsely representing that about $900 million of Irving Place III SPV’s assets would be securing the investment. According to USA Today, Caspersen told the investor, which was a charitable foundation, that he wanted to invest in an $80M credit facility that he said his firm had established to facilitate investments in the secondary market for private equities.

The promissory note promised 15% yearly interest that was payable quarterly. The note was supposed to be totally redeemable within 90 days upon notice. After receiving the money, Caspersen allegedly took the money for his own use. He later used similar misleading and false statements to solicit another $20M from that investor and $50M from a NY private equity firm. This was after purportedly losing most of the $25M through high-risk options trading. Both times he was unsuccessful in obtaining the founds. In fact, the charitable foundation became suspicious and demanded that he return the $25M, which has yet to happen.

Caspersen is also accused of setting up Irving Place III SPV LLC so that others would associate it with Irving Place Capital Partners III, which was a legitimate private equity fund to which he is not associated. When he drafted the promissory note and a security agreement, he allegedly signed them using the fake name “John Nelson” on the supposed behalf of Irving Place III SPV.

The Commission wants a permanent injunction, monetary penalties, and the restoration of the purportedly ill-gotten funds plus interest. Meantime, Caspersen is also charged in criminal court with wire fraud over the purported scam. If convicted, he faces up to 40 years behind bars. He also could be subject to millions of dollars in fines. In a statement, U.S> Attorney Preet Bharara accused him of setting up bogus email addresses and misleading domain names, as well as fabricating fake financiers.

For the last three years Caspersen was a managing principal at private equity firm Park Hill Group. He was let go in the wake of the allegations against him. Before that he was at Coller Capital.

Unfortunately, even sophisticated clients can become victims of financial fraud. That is why our securities lawyers at The SSEK Partners Group are here to help institutional investors and high net worth individual clients recoup their losses from securities fraud, negligence, and other wrongful acts. Contact us to request your free case consultation today. We have helped investors recoup their institutional investor fraud losses.

Read the SEC Complaint (PDF)