Mass Ave Global (MassAve) agreed to pay $350,000 for alleged failures that led the investment adviser to make false and misleading statements to investors, according to the Securities and Exchange Commission (SEC).
Winston Feng, the co-founder and chief executive officer at MassAve, agreed to pay $250,000 and be suspended for 12 months from investment work, the SEC announced in a press release Wednesday.
The details: New York City-based MassAve, which had about $1.1 billion in regulatory assets under management until it began winding down operations in early 2023, violated the antifraud and compliance provisions of the Investment Advisers Act, the SEC alleged in its order.
From 2020-22, MassAve made materially false and misleading statements about the holdings and exposure of its flagship opportunity fund, Mass Ave Global Partners, according to the SEC. Feng allegedly modified portfolio data and made false statements to investors in monthly tear sheets, summary portfolios, and top 10 position lists.
From late 2022 to early 2023, MassAve didn’t tell investors about a conflict of interest because of its other co-founder operating a separate hedge fund in China.
Compliance considerations: MassAve’s policies and procedures required public communications to be reviewed and approved by compliance before being distributed, but it failed to implement them, the SEC said.
MassAve acknowledged to investors that before disseminating information about the flagship fund it needed to adopt policies, procedures, controls, and disclosures to independently check performance information about the fund, including information received from the administrator, the SEC said. After MassAve reported to investors in January 2023 about the inaccurate communications to them, the firm received a “wave of redemption requests” and wound down its operations, the agency said.
“Complete and accurate reporting at all turns, whether in investor communications or about conflicts of interest, is vital to investor protection,” Osman Nawaz, chief of the SEC Enforcement Division’s Complex Financial Instruments Unit, said in the release. “We will continue to hold individuals accountable for falling short in making such disclosures.”
MassAve could not be reached for comment.
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