SEC Dismisses Proceedings vs. Auditor to NYPPEX
New York, December 16, 2024 – The U.S. Securities and Exchange Commission dismissed proceedings against Halpern & Associates, the independent auditor to NYPPEX Holdings, LLC and various affiliates including ACP X, LP, a private equity fund subsidiary. The SEC is the ultimate securities regulator in the United States.
The original allegations stem from the Office of the New York Attorney General Letisha James. In summary, the NY AG complaint alleged fraud under the NY Martin Act against ACP X, LP, NYPPEX Holdings, LLC, and various other parties.
The NY AG complaint and the NY State Court decision were strongly criticized in an independent investigation report by law firm, Greenberg Traurig. The report concluded the NY AG constructed a narrative which was premised on a fundamental misunderstanding of the fund’s governing documents and how private partnerships work. The Court appears to have adopted the NYAG’s allegations without critical analysis. The Decision contains no reference to or discussion of any provision of the [fund’s] PPM or LPA, nor to the testimony of multiple Limited Partners who testified on behalf of the [General Partner].
Numerous investors in the private fund have sent letters to the Manhattan State Court complaining about the NY AG’s interference in their private partnership, about the Court’s bias in favor of the NY AG, and rejecting the receiver’s fee requests and management of the fund.
Limited partner, Larry Garon, an attorney, believes “[the receiver’s] fees requested are utterly ridiculous. I believe every [dollar] in this totally unnecessary process [by the NY AG] to “protect investors” has in fact been misappropriated…”
Another limited partner, Wells Martin III, stated “The bottom line is the returns on my investment [in the fund] are not coming to me, but to [the receiver]. That is not fair and it is not the way a receivership should work.”
Limited partner, Robert Schubert, believes “The [receiver] has made numerous mistakes and is clearly incompetent… Please immediately dismiss [this receiver], require [the receiver] to refund all fees…and allow the [fund’s] Limited Partners Advisory Committee to return as much…of the investors investments as possible. This would end this travesty of justice that has been going on way too long.”
To date, the NY Courts have failed to implement the fund investor’s recommendations.
For further information, please contact info@nyppex.com.
About NYPPEX Holdings
NYPPEX Holdings is one of the world’s leading providers of risk management solutions for the private capital funds industry. NYPPEX serves private fund managers, financial institutions, endowments, foundations, institutional investors, family offices, private clients and their respective advisors worldwide.
Since 2004, the NYPPEX QMS™ has been formerly recognized by the U.S. Internal Revenue Service though a private letter ruling under Internal Revenue Code §1.7704. A NYPPEX QMS Opinion Letter can help private capital funds meet the requirements of a QMS safe-harbor exemption under IRS §1.7704. This facilitates regulatory compliance with the IRS and helps avoid an adverse taxable event when private funds seek to permit higher volumes of secondary interest transfers annually.
