The Securities and Exchange Commission (SEC) today initiated settlement proceedings against former registered investment adviser Mass Ave Global Inc. and co-founder and CEO Winston M. Feng for making false and misleading statements to investors in MassAve’s flagship opportunity fund.
To settle the SEC’s charges, MassAve agreed to pay a civil penalty of $350,000 and Feng agreed to pay a penalty of $250,000. Additionally, Feng, who is also the chief investment officer and portfolio manager at MassAve, is suspended for 12 months from industry-related work.
Pursuant to SEC mandates, from 2020 to 2022, New York-based MassAve, an Asia-focused investment adviser with more than $1 billion in regulatory assets under management, made a series of materially false and misleading statements regarding holdings and exposures of his flagship venture capital fund. The orders found that some of the misrepresentations were the result of changes Feng made to underlying portfolio data, which MassAve then included in investor communications, such as monthly tear sheets, portfolio snapshots and top 10 position lists.
Additionally, according to SEC orders, from late 2022 to early 2023, MassAve failed to disclose to investors the conflict of interest arising from MassAve’s other co-founder managing a separate hedge fund in China. The SEC’s order against MassAve also found failures in the company’s compliance policies and procedures.
Pursuant to the Securities and Exchange Commission’s orders, in January 2023, MassAve told investors that its communications about the flagship fund were inaccurate and did not contain appropriate disclosures. Soon after, MassAve received a wave of redemption requests and has since gone out of business.
The SEC’s orders found that MassAve violated the anti-fraud and compliance provisions of the Investment Advisers Act of 1940 and that Feng violated the anti-fraud provisions of the Advisers Act. Without admitting or denying the SEC’s findings, MassAve and Feng consented to the entry of the SEC’s orders requiring them to cease and desist from further violations, censure MassAve and impose the sanctions listed above.