Infinity Q Fund Halts Investors Redemptions In Wake of Alleged Fraud
From the Desk of Jim Eccleston at Eccleston Law LLC:
The $1.8 billion Infinity Q Diversified Alpha Investor Fund (IQDAX) has taken remarkable actions due to alleged fraud. After the Securities and Exchange Commission (SEC) was unable to value certain assets held in the fund, the fund subsequently paused redemptions and postponed the date of redemption payments beyond seven days.
An order from the SEC states that Infinity Q's chief investment officer and company founder, James Velissaris, altered the method for counting specific asset valuations, which raised concerns about the accuracy of the reported fair value of those fund holdings.
Infinity Q confirmed the SEC findings on its website, saying that "it could not value the assets for purposes of calculating the fund's net asset value." The company also released a statement indicating that Velissairs has been relieved of his duties. Infinity stated that it would proceed with a liquidation plan and distribution to shareholders. Infinity Q will present the liquidation plan and distribution to the SEC for approval.
The six-year-old fund received a four-star rating from Morningstar. A Morningstar analyst describes the multi-strategy alternative fund as complex and not commonly included in most retail investor portfolios.
The Infinity Q fund illustrates how some alternative strategies can be opaque, making it difficult for advisors to analyze the risk and reward potential involved.
Eccleston Law LLC represents financial advisors nationwide. Please contact us to discuss any issues that you may have.
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