According to asset management giant Amundi’s chief investment officer, “parts” of the private equity industry look an awful lot like a Ponzi scheme. According to the Securities and Exchange Commission, one of those parts is “boutique private equity firm” StraightPath Venture Partners, specifically the part where the firm’s four alleged leaders—in addition to allegedly lying (as p.e. firms are allegedly wont to do) about StraightPath’s access to highly sought-after pre-IPO shares—used at least some of the $410 million they raised to pay out distributions from its nine funds.
That all sounds pretty bad, especially the part in which at least $73 million of the aforementioned $410 million allegedly went straight into the pockets of the aforementioned four. But apparently it’s not, as the SEC seems fairly nonchalant about the whole thing. After all, it’s just the way the industry (allegedly) does business.
StraightPath Venture Partners LLC and the Securities and Exchange Commission have agreed to a resolution of the agency’s civil fraud charges against StraightPath and are working out details, including naming a receiver for the firm, a court document shows.
The agreement also includes the creation of an escrow account of more than $15 million to be supplied by three of the four individual defendants in the case….