Business & Tech

SEC Halts Beverly Hills Hedge Fund Business

IU Group Inc. made false representations to potential investors, an SEC complaint says.

The Securities and Exchange Commission was granted an emergency court order Friday to shut down a Beverly Hills-based hedge fund and wealth management business that it said made numerous false representations about its operations to potential investors. 

The SEC says IU Group Inc. tried to attract investors using religious messages. IU Group principal Elijah Bang and salesperson Daniel Lee targeted Christians, retirees and university professors and claimed on websites to have been founded by “devoted Christians who believe in God, Jesus Christ and the Holy Spirit,” according to an SEC complaint filed in U.S. District Court in Los Angeles.

The SEC’s complaint alleges that Bang and Lee made numerous false representations to potential investors and clients, including the following statements:

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  • The hedge fund was operational with a successful performance history dating back to January 2007.
  • IU Wealth’s clients consist of professional athletes, actors, producers, doctors, professors, politicians and executives of private corporations.
  • IU Wealth manages more than $800 million.

The SEC says that IU Group was unsuccessful in obtaining any hedge fund investors or wealth management clients before the agency's emergency action halted its operations. The SEC alleges that Bang and Lee solicited potential investors and wealth management clients using various company names and websites, including IU Wealth Management LLC and Icon Capital Management LLC. Lee also allegedly sent email solicitations to gain clients.

The SEC complaint asserts that IU Group and IU Wealth are not registered with the SEC. IU Group's business license was suspended by the state of California, and IU Wealth and Icon Capital are not companies of record in California, the agency reported.

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This report was compiled with information from City News Service and the U.S. Securities and Exchange Commission.

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