Accused Fraudster Denies SEC Charges

Sep 7 2011 | 11:12am ET

The allegations against Neural Partners and one of its founders are "absolutely false," Balal Faruki, the accused, has said.

The Securities and Exchange Commission sued Faruki and his firm last week, accusing it of misleading investors and calling itself a hedge fund. The only problem, according to Faruki, is that Chicago-based Neural Markets isn't a hedge fund but a private partnership, and it didn't have investors, per se.

"We don't take public money," he told the Chicago Sun-Times. "We don't advertise ourselves to the public. We're not interested in that."

"We don't want to be a hedge fund," Faruki said.

Instead, what is now an SEC lawsuit began as a dispute among partners; according to Faruki, one of the partners, Mark Tishfield, a portfolio manager at Millennium Partners, sought to pull his $1 million after the quantitative firm lost money late last year—and demanded that his fellow partners cover his losses.

"That's not how this works," Faruki told the Sun-Times. "The agreement he signed is that we're partners and we all share equally in the gains and losses."

Faruki said his vendetta against his partners began only after the criminal authorities declined to pursue the matter. And he's winning.

"It's working," Faruki said. "He definitely ruined our lives. And the government is his free lawyer right now."

Faruki said he plans to get a lawyer of his own: to sue Tishfield.


In Depth

Bob Doll's Ten Market Predictions For 2016

Jan 7 2016 | 9:37pm ET

Well-known market strategist Robert Doll has published his annual list of ten predictions...

Lifestyle

Citadel's Ken Griffin Donates $40M To New York's Museum of Modern Art

Dec 22 2015 | 9:23pm ET

Citadel founder Ken Griffin has donated $40 million to New York’s Museum of Modern...

Guest Contributor

Hedge Fund Marketing - Making the Most of Your Salesperson

Jan 20 2016 | 8:11pm ET

In this contributed article, Bruce Frumerman of Frumerman & Nemeth takes a close...