Mass Ave Global and CEO Fined for Misleading Investors, SEC Reports

Mass Ave Global (MassAve) has agreed to pay $350,000 for alleged failures that led the investment adviser to make false and misleading statements to investors, according to the Securities and Exchange Commission (SEC). Winston Feng, co-founder and CEO at MassAve, has agreed to pay $250,000 and face a 12-month suspension from investment work, the SEC announced in a press release Wednesday.

Based in New York City, MassAve, which managed about $1.1 billion in regulatory assets until it began winding down operations in early 2023, violated the antifraud and compliance provisions of the Investment Advisers Act, the SEC alleged in its order. From 2020 to 2022, MassAve made materially false and misleading statements about the holdings and exposure of its flagship opportunity fund, Mass Ave Global Partners, according to the SEC. Feng allegedly altered portfolio data and made false statements to investors in monthly tear sheets, summary portfolios, and top 10 position lists.

Furthermore, from late 2022 to early 2023, MassAve did not inform investors about a conflict of interest due to its other co-founder operating a separate hedge fund in China. MassAve's policies and procedures required public communications to be reviewed and approved by compliance before distribution, but the firm failed to implement these measures, the SEC stated.

MassAve acknowledged to investors that it needed to adopt policies, procedures, controls, and disclosures to independently verify performance information about the fund, including data received from the administrator, before disseminating information about the flagship fund. After MassAve reported to investors in January 2023 about the inaccurate communications, the firm experienced a “wave of redemption requests” and subsequently wound down its operations, the agency noted.

Osman Nawaz, chief of the SEC Enforcement Division’s Complex Financial Instruments Unit, emphasized the importance of transparency, stating, “Complete and accurate reporting at all turns, whether in investor communications or about conflicts of interest, is vital to investor protection. We will continue to hold individuals accountable for falling short in making such disclosures.”

MassAve could not be reached for comment.

By fLEXI tEAM