According to the lead paragraph in the SEC's press release, they are charging an investment adviser with securities fraud for misleading investors about the financial condition of their funds, and that they were controlling the investment decisions of the funds, when same were controlled by a third party.
Overstating your asset values by as much as $160 million certainly smells like a fraud, but not telling investors who is actually managing the investments is a fraud? It certainly can be, but is it.
If the person controlling the investments has been charged with securities fraud, and has had his assets frozen, that omission may very well be fraud. It could be a material part of an investor's decision to invest, and depending on the circumstances; a fraud.
We will have to see if the SEC can prove its allegations, but for now, the complaint is linked at its press release. More>>>