Alternative investment platform YieldStreet has responded to queries regarding a recent report alleging that the Securities and Exchange Commission (SEC), as well as the Federal Bureau of Investigation (FBI), were investigating specific securities issued via the platform.
Last week, it was reported that both the SEC and FBI were investigating investments “sold by crowdfunding site Yieldstreet.” The FBI was said to be collecting information on some of Yieldstreet “practices.” The missive was covered by WSJ.com claiming the issue revolved around “ship breaking” securities regarding $90 million in loans.
Ship breaking has to do with taking old ships and removing items of value and reselling these parts as well as the scrap metal. It was alleged that approximately a dozen ships tied to these securities had gone missing.
Crowdfund Insider contacted YieldStreet for additional information.
According to a YieldStreet representative, despite what WSJ.com reported, they do not believe they are the target of any investigation and the perpetrators in question are the Lakhanis.
A separate report from last April indicates that the Dubai Trading Association, operated by the Lakhanis, is facing allegations regarding fraud valued at over £72 million. Lawsuits have been filed in both the UK and the US, according to that report.
“It’s also important to note that we alerted the SEC when we discovered the immense global fraud scheme the Lakhanis had perpetrated, just as we have notified other governmental jurisdictions across the globe,” said the Yieldstreet representative. “Keep in mind, in March, we uncovered this scheme – long before anyone else. We have done nothing wrong. Significantly, the Lakhanis have defrauded not only Yieldstreet, but also at least five other leading PE firms and financial institutions. We are all victims of the Lakhanis.”
Yieldstreet added that despite the pandemic their team has been prosecuting the Lakhanis in actions in six countries on three continents to recover for their investors, meeting every day since March to advance their recovery efforts.
The Yieldstreet spokesperson added:
“One last important point: We want the same thing as our investors, full recovery. We are investors: the founders, members of the management team, employees, board members, friends, and family are also invested in these deals. We’re not done fighting, not by a long shot. We’ve been keeping investors updated in the monthly reports and there will be more to report in the near future.”
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