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The founders of a failed crypto hedge fund have been hit with a billion-dollar asset freeze, the Wall Street Journal reported. Su Zhu and Kyle Davies, who ran collapsed crypto hedge fund Three Arrows Capital, have been ordered by a British Virgin Islands court not to sell assets worth $1.144 billion, according to Teneo, the liquidator of the fund. The order also names Kelly Chen, Davies's wife. It is the latest effort by Teneo to seize assets from Zhu and Davies after the failure of Three Arrows, which made the duo deeply controversial figures in crypto. Zhu was held by Singaporean authorities in September, after Teneo won a court order. After two months, he was transferred from prison to home detention to serve the rest of the sentence. He was released earlier this week. Teneo said that the assets it wants frozen are intended to cover fund losses that the founders could have prevented. The freeze prevents Zhu from selling two properties in Singapore, while Davies and Chen can't dispose of one unit in the country, according to court documents. Zhu, Davies and Chen can each spend up to $10,000 a week to cover living expenses, but must let Teneo's lawyers know where the money will come from, the documents say.

The U.S. Securities and Exchange Commission (SEC) on Monday filed charges against Nigerian businessman Dozy Mmobuosi and three companies of which he is CEO, alleging they inflated the financial performance of the companies and key subsidiaries to defraud investors, Reuters reported. The SEC said in a statement that it filed charges in U.S. District Court in New York against Mmobuosi, who made headlines this year following a bid to buy an English premier league team. The SEC also charged Tingo Group, Agri-Fintech Holdings and Tingo International Holdings for violating the anti-fraud provisions of the federal securities laws and Nasdaq reporting and internal controls. Tingo Group's shares slumped in June after short-seller Hindenburg Research criticized its founder and alleged that the fintech firm had "fabricated" its financials.

The former president and CEO of a Los Angeles-based anti-poverty nonprofit agency was sentenced today to six months in federal prison for embezzling money from the nonprofit for his personal benefit, failing to report these funds on his tax returns, and intentionally misapplying more than $600,000 in grant money to pay for unauthorized expenses, according to a DOJ press release. Howard Dixon Slingerland of Studio City, Calif., was sentenced by U.S. District Judge Dolly M. Gee, who also ordered him to serve six months of home confinement, pay a fine of $10,000, pay $750,470 in restitution and to perform 200 hours of community service. Slingerland pleaded guilty on March 8 to one count of conversion and intentional misapplication of funds from an organization receiving federal money and one count of subscribing to a false federal income tax return. From 1996 until he was fired in September 2019, Slingerland led the Youth Policy Institute Inc. (YPI), a Hollywood-based nonprofit agency that worked to eradicate poverty, eventually becoming president and CEO. YPI operated in some of the highest needs neighborhoods in Los Angeles, running programs aimed at supporting youth education, development, safety, job training, and health and wellness. As the head of YPI, Slingerland had check-signing authority over YPI’s bank accounts and was the personal guarantor of YPI’s credit card. From January 2015 to February 2019, Slingerland caused at least $71,533 of YPI funds to be spent on unauthorized expenditures, including Slingerland’s personal property tax bill that exceeded $14,000; a Slingerland family dinner at an upscale New York City restaurant costing more than $6,000; private tutoring for a family member costing nearly $11,000; and a home computer and software valued at nearly $2,000.

Private-equity firm GPB Capital Holdings, facing civil fraud allegations since early 2021, will be liquidated by a court-appointed receiver, signaling the end of a long wait for roughly 17,000 investors whose capital has been tied up since at least 2018, the Wall Street Journal reported. Chief Judge Margo Brodie of the U.S. District Court for the Eastern District of New York put GPB under the control of Joseph Gardemal of Alvarez & Marsal, the firm’s court-appointed monitor since February 2021. As its monitor, Gardemal could veto moves by firm managers but had limited power to do more, and for more than a year he has recommended receivership to expedite the return of investor capital. “We are all looking forward to the prompt return of our invested capital,” said Jay Frederick, an investor in Little Rock, Ark. In early 2021, the Securities and Exchange Commission brought fraud charges against GPB involving around $1.7 billion in investments in what New York’s attorney general described as a “Ponzi-like scheme” that used investor funds to cover promised 8% investment returns. The civil complaint followed criminal indictments against GPB’s founder, a senior executive and the firm’s principal marketer in January 2021.

Securities and Exchange Commission Chair Gary Gensler has warned businesses against “AI washing,” or making false artificial intelligence-related claims, likening it to the greenwashing phenomenon that has been the target of an agency crackdown, the Wall Street Journal reported. Gensler said yesterday that securities laws bar phony claims and require companies to give “full, fair and truthful” disclosures. “Don’t do it,” Gensler said at a conference hosted by The Messenger, a news outlet. “One shouldn’t greenwash and one shouldn’t AI wash.” “AI washing” has emerged as an informal term that describes businesses’ making unfounded AI claims to the public, akin to greenwashing, which refers to companies making unfounded representations about environmental sustainability. The explosive growth in the number and sophistication of AI applications has led to concerns that marketing claims might not match what companies are delivering. The Federal Trade Commission in February warned companies across the economy that it would be on the lookout for bogus AI claims in advertising, from exaggerations of AI-powered products’ capabilities to outright fabrications that a product incorporates AI technology.