The Securities and Exchange Commission (SEC) has entered a final judgment against defendant Scott Lindell, whom the SEC previously accused of misconduct in connection with a more than $1 billion overvaluation scheme.
Lindell is a former senior employee of SEC-registered investment adviser Infinity Q Capital Management LLC.
The SEC’s complaint was filed on September 30, 2022 in the US District Court for the Southern District of New York. The SEC alleged that, from at least February 2017 through February 2021, James Velissaris, founder of Infinity Q and former Chief Investment Officer, actively manipulated the valuation models available from a certain third-party pricing service and altered the data to hide the poor performance of the mutual fund and hedge fund advised by Infinity Q.
Lindell allegedly negligently misled investors and potential investors, fund board representatives and others that the pricing service was “independent” of Infinity Q when, in fact, Velissaris exercised control over the pricing service. As further alleged, Lindell, at Velissaris’ direction, helped Velissaris submit misleading documents to SEC staff in response to the SEC’s initial inquiries in this matter and, on one occasion, helped Velissaris mislead the fund’s auditor .
According to the complaint, Lindell also made misrepresentations in various Infinity Q filings with the Commission.
Lindell consented to a final judgment permanently enjoining him from violations of the anti-fraud provisions of Section 17(a) of the Securities Act of 1933, the Securities Exchange Act of 1934, Rule 13b2-2 and Sections 204(a ), 206( 2 ), 206(4) and 207 of the Investment Advisers Act of 1940 and rules 204-2(a), 206(4)-7 and 206(4)-8 thereunder, which direct him to pay a civil penalty in the amount of $100,000 and bar him for two years from serving as an officer or director of any SEC-reporting company.