The SEC charged the CEO of Simran Capital Management on Thursday with defrauding CalPERS and lying to other potential clients, according to an SEC news release.
CEO Mesh Tandon has agreed to settle the Securities and Exchange Commission's fraud charges, which claim Mr. Tandon lied about his firm's assets under management in order to meet a minimum required threshold and receive a mandate from the $258.3 billion California Public Employees' Retirement System, Sacramento.
In May 2008, Mr. Tandon told CalPERS that Simran Capital met the minimum $200 million AUM requirement, when in fact it managed about $80 million at that time. CalPERS hired Simran in 2008 to manage a high-yield fixed-income strategy.
CalPERS spokesman Joe DeAnda said in an e-mail that the pension fund supports the SEC's actions and ended its relationship with Simran several years ago. Mr. DeAnda did not provide any further information.
According to the SEC, Mr. Tandon touted the CalPERS relationship to other prospective clients from 2008 to 2011 and on more than a dozen occasions falsely inflated the firm's AUM. Mr. Tandon and Simran also inflated the AUM in at least four of the firm's ADVs filed with the SEC. He also later attempted to mislead the SEC during a routine examination of the money management firm, according to the news release.
Simran ceased operation last year. Mr. Tandon neither admitted nor denied the findings but agreed to be barred from the securities industry and pay a $100,000 penalty. He could not be reached for comment.