Palathinkal was earlier accused of fraud, along with Vineet Kalucha.
By Raif Karerat
WASHINGTON, DC: The Chief Financial Officer of Aphelion Fund Management, based in New York, George Palathinkal, has been absolved of all charges of fraud by the Securities and Exchange Commission.
The SEC had earlier charged Vineet Kalucha, the Chief Investment Officer at Aphelion Fund Management and Palathinkal with fraud.
According to a press release previously issued by the SEC, Kalucha and Palathinkal were jointly responsible for a scheme that over-valued the success of their investment strategies in order to inflate confidence among investors.
However, a Stipulation of Dismissal provided to The American Bazaar from the United States District Court, Southern District of New York, reads:
Related Story: SEC files fraud case against Aphelion Fund Management’s CIO Vineet Kalucha, CFO George Palathinkal
Pursuant to Federal Rule of Civil Procedure 4l(a)(l)(A)(ii), Plaintiff United States Securities and Exchange Commission (“SEC”) and Defendant George Palathinkal jointly stipulate that all claims that were asserted by the SEC against Defendant George Palathinkal in this action be dismissed with prejudice and without costs, and waiving all rights of appeal.
The stipulation was co-signed by the attorneys for both the plaintiff, the U.S. Securities and Exchange Commission, and the defendant, Palathinkal.
The complaint had previously, specifically listed Kalucha, Palathinkal, and Aphelion Fund Management as a whole.
“We allege that on multiple occasions, Aphelion, Kalucha, and Palathinkal intentionally overstated the success of their investment strategy,” said Robert J. Burson, associate director of the SEC’s Chicago Regional Office. “Kalucha also has been using investor money as his own, and emergency action was necessary to protect the interests of investors.”
According to Fin Alternatives, Kalucha still stands accused of misrepresenting the firm’s assets under management in 2013, claiming it had $15 million when the total was actually never more than $5 million. He also allegedly siphoned some of the funds he did manage into luxury car payments and settlements of legal actions against him personally—actions unrelated to Aphelion.