SEC charges ex-Apollo senior partner with defrauding clients

  • Allegedly charged funds $1,100 for trips to hair salon
  • $3,500 for a suit for his father
  • Rashid paid back $290,000

The SEC officially charged Mohammed Ali Rashid, a former senior partner at Apollo Global Management, with defrauding his fund clients by secretly billing them for about $290,000 in personal expenditures from 2010 to 2013.

The regulator claims that Rashid, 41, illegally billed his clients for expenses, which included a five-night stay at the Ritz Carlton for the executive and his wife, $2,300 in personal charges at an Apple store in 2010, and a $3,500 suit for his father, a court filing says. Rashid fraudulently charged more than 1,000 personal items and services to the PE funds he advised, the SEC said.

In one instance, Rashid tried to get more than $1,100 reimbursed from two funds by falsely claiming the charges were for business-related meals. In fact, the $1,100 was to cover his visits to a hair salon, the SEC said in a lawsuit filed in U.S. District Court in Manhattan.

Rashid continued his bad behavior even after Apollo caught him and told him to stop, the filing said. The PE executive repaid the $290,000 that he charged to clients and left Apollo in 2014, the SEC said. The regulator, which did not name Apollo in the suit, is seeking civil penalties against Rashid.

The charges come a year after Apollo agreed to pay $52.7 million to the SEC to settle claims it misled investors. The SEC also alleged that Apollo failed to take appropriate action to protect its clients from a senior partner that improperly expensed personal items and services to the funds, Buyouts reported in August. The SEC didn’t identify the ex-senior partner at the time.

The New York Post reported in May that Rashid had landed at Safanad, a Dubai-based PE firm, where he was consulting. An executive for Safanad confirmed to Buyouts that Rashid did work for the firm until he resigned from his consultancy agreement. When Rashid left Safanad is unclear.

Apollo, in an Oct. 26 statement, said Rashid’s misconduct was discovered and stopped by the firm, which promptly reported his behavior to the SEC more than four years ago. Any affected funds or portfolio companies were reimbursed, Apollo said. “This misconduct is inconsistent with the high standards that Apollo requires of its employees,” Apollo said.

Action Item: Read the SEC’s lawsuit against Rashid here.

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