A former Circle board member is being sued by the US Securities and Exchange Commission (SEC) over alleged investment fraud, it has been revealed.
According to a 13th May press release unsealed by the federal agency, Iftikar Ahmed is accused of fraud and self-dealing in connection with Oak Investment Partners.
Ahmed served as a general partner at Oak, which took part in Circle's $17m Series B round.
Two companies said to be under the control of Ahmed, Iftikar Ali Ahmed Sole Prop and I-Cubed Domains LLC, were named as relief defendants in the complaint. $55m in assets were frozen per an emergency court order.
Ahmed is understood to have stepped down from Circle’s board of directors after a separate SEC suit was filed in early April. Ahmed was arrested and accused of pocketing more than $1m in illicit profits as a result of insider trading, as reported at the time by Fortune.
The new SEC complaint outlined a series of transactions during which Ahmed is said to have accrued roughly $27.5m. This total includes $18m that was unlawfully directed toward a bank account alleged to be under Ahmed's control following the use of $20m to purchase $2m-worth of shares in an e-commerce venture.
Ahmed is also said to have steered Oak funds into other investments in which he had an ownership interest that he did not disclose.
The agency is also pursuing a broader court order against the investor, which includes additional fines and damage payments, it said:
"The SEC is seeking a preliminary injunction to continue the freeze of Ahmed's assets and seeks to have Ahmed return his allegedly ill-gotten gains with interest and pay civil monetary penalties."
The full complaint can be read below.
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