Legend has it that Joseph P. Kennedy Senior pulled out of the stock market in 1929 when a shoe shine boy started giving him stock tips. What to do when your driver starts giving investment advice?
Shahin Ahmed was the personal driver of a hedge fund manager. According to the SEC complaint, Mr. Ahmed met a prospective investor and told him he was a “senior investment professional managing investments” at the hedge fund. He met the investor in the firm’s lobby during COVID and convinced him to give $91,000 to invest, with Mr. Ahmed taking a 2 and 20 in fees. Fake statements, additional capital and massive losses ensued.
The SEC complaint also details a second investor couple that were convinced to give Mr. Ahmed access to their brokerage account for a 30% share of any profits. Mr. Ahmed traded on margin and not only lost all of their capital, but left them with $60,000 in margin call costs.
The hedge fund found out about this trading activity and fired Mr. Ahmed. The SEC filed its case three years later.
To distinguish from the shoe shine advice, Mr. Ahmed was pretending to be a financial professional. The shoeshine boy was giving advice and shines at the same time. I think Mr. Ahmed’s alleged victims would have been less likely to give him their money if had been pitching them while driving around.
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