SEC charges hedge fund driver with posing as money manager

SEC says New York advisory firm driver posed as money manager, misled three investors and triggered more than $1 million in combined losses.   

The Securities and Exchange Commission has brought a civil action in the U.S. District Court for the Eastern District of New York accusing Shahin Ahmed of running a fraudulent scheme while working as a driver at a registered investment adviser that managed a hedge fund.   

Ahmed, 53, is described in the filing as a resident of Orchard Park, New York, who was employed by “Investment Adviser A” as a driver for the firm’s founder and portfolio manager, with the title “administrative assistant,” until his employment was terminated in or around March 17, 2022.   

According to the SEC, between at least March 2020 and February 2022 Ahmed defrauded three people: one individual investor and a married couple identified as Investor 1, Investor 2 and Investor 3. The agency says Ahmed had no investment experience at Investment Adviser A or any other financial firm, no formal education beyond high school and no securities licenses or investment adviser registration.   

The filing alleges that Ahmed met Investor 1 in or about 2012 through a mutual friend and falsely presented himself as a senior investment professional managing investments at Investment Adviser A. Over the years, he allegedly continued to represent himself as an investment professional.   

In or around April 2020, at Ahmed’s request, he and Investor 1 met in the lobby of Investment Adviser A’s New York offices, which were closed due to the COVID‑19 pandemic. The SEC says Ahmed provided the firm’s marketing materials and touted its portfolio, activist role and board memberships, while claiming he had performed due diligence on the holdings as a securities professional with the firm.   

The SEC alleges that in or around May 2020 Ahmed asked Investor 1 to invest with him “through Investment Adviser A.” Investor 1, relying on those representations, allegedly gave him $50,000 and wrote the check to “Honest Partners LLC.” Honest Partners, a New York limited liability company Ahmed formed in 2018, had a name the SEC calls “deceptively similar” to that of Investment Adviser A.   

According to the filing, Investor 1 believed Investment Adviser A would manage the investments that Ahmed said he would make. In or around July 2020, Ahmed allegedly told Investor 1 he could buy stock options in one of Investment Adviser A’s major holdings at a steep discount, and Investor 1 provided an additional $41,000.   

The SEC says Ahmed did not invest the $41,000 in those options. Instead, he allegedly transferred the entire $91,000 from Investor 1 into a brokerage account opened in the name of Honest Partners. On the account application, Ahmed is said to have listed his occupation as “softwaer developer” and Honest Partners’ business as “software developement,” without indicating he was investing on behalf of others.   

Ahmed later presented Investor 1 with a written agreement dated June 30, 2020, describing “investment money ($91,000.00)” to be invested for three years, with 2% management fees, 20% of net profits after tax as remuneration and a promise to “repay a total amount of $91,000.00” in three years, subject to a right to request earlier repayment. Investor 1 did not sign the agreement but agreed orally to pay Ahmed for managing and trading the funds, according to the SEC.   

The filing states that in or around January 2021, Ahmed provided Investor 1 with an investor relations letter from Investment Adviser A describing its 2020 performance and historical returns. When asked about Investor 1’s investment, Ahmed allegedly responded that all of Investment Adviser A’s hedge fund holdings were doing very well.   

In or around November 2021, Ahmed purportedly sent Investor 1 a written statement for Honest Partners showing an account value of $117,046.50 as of November 30, 2021, including positions in two of Investment Adviser A’s major securities holdings and a “Day Gain” of “+1,224.00 (+1.06%)” and a “Total Gain” of “+40,921.50 (+53.76%).” The SEC says these figures were false and that the Honest Partners account held no money as of that date.   

A letter titled “Honest partners llc Promissory notes” that accompanied the statement stated that Investor 1 would be entitled to a “redemption amount of $117.046.50” due on February 15, 2022, according to the filing.   

Separately, the SEC alleges that in or around May 2021 Ahmed asked Investor 1 to open and fund an online brokerage account for Ahmed to trade on his behalf. Ahmed allegedly claimed he traded the brokerage accounts of other clients, said he needed to use an account in Investor 1’s name because of his employment at Investment Adviser A’s hedge fund, and promised to take 30% of trading profits. He also allegedly guaranteed that Investor 1 would not lose money and promised to replenish 100% of any principal losses.   

On or about May 18, 2021, Investor 1 funded the account with $300,000, provided Ahmed with the login credentials and added Ahmed’s phone number as the primary phone number on the account so he could trade, the SEC says. The brokerage firm did not authorize Ahmed to trade in the account, and its policies prohibited investment advisory activity in Investor 1’s self‑directed account, according to the filing.   

Ahmed’s initial trading generated profits, and Investor 1 paid him $15,000 as a “Financial Consultation Fee.” But the SEC says subsequent speculative trading produced significant losses. By the time Investor 1 complained and the brokerage firm removed Ahmed’s phone number and access, the account had incurred over $180,000 in trading losses, and Investor 1 was able to recoup only approximately $115,355 of the $300,000 deposited.   

The filing also says that after Investor 1 demanded his money back, Ahmed provided three post‑dated checks: one dated January 1, 2022, for $245,000; one dated February 3, 2022, for $100,000; and one dated February 15, 2022, for $117,046.50. All three checks failed to clear due to insufficient funds when Investor 1 tried to deposit them in February 2022, according to the SEC. Investor 1 never recouped the $91,000 given to Ahmed and suffered losses of over $180,000 in the brokerage account.   

For the married couple, Investors 2 and 3, the SEC says Ahmed again claimed to be a professional securities trader with years of experience managing a stock fund and said he worked at Investment Adviser A, described to them as “a well-known hedge fund management company.” He allegedly promised guaranteed, risk‑free investment and said he would return any losses caused by his trading.   

In or about March 2020 and September 2021, Investors 2 and 3 gave Ahmed login credentials to two online brokerage accounts and agreed to pay him 30% of any net profits and for his investment advice, the filing states. Ahmed then engaged in risky trading, including trading on margin. In one account, a position in a single stock, amplified by margin, produced losses beyond the value of all assets in the account, leading the broker to liquidate all positions and leaving more than $60,000 in margin call costs owed by Investors 2 and 3, according to the SEC.   

Overall, the SEC says Ahmed’s trading and related activity caused total losses of over $637,000 in Investors 2 and 3’s brokerage accounts. During the period he traded for them, they paid him $50,000.   

The SEC alleges that Ahmed’s conduct violated antifraud provisions of the federal securities laws and provisions of the Investment Advisers Act. The agency is asking the court to permanently bar him from further violations, require him to give up what it calls ill‑gotten gains with interest, impose civil penalties, and prevent him from participating in the issuance, purchase, offer or sale of any security, except for his personal accounts, or from acting as or being associated with any investment adviser.   

The case was filed December 5, 2025, in the U.S. District Court for the Eastern District of New York. The allegations reflect the SEC’s account of events, and no court has yet made a determination on the claims.