SEC Enforcement Actions Target Hedge Fund Fraud in Washington, D.C.

On February 26, 2025, the Securities and Exchange Commission (“SEC”) announced in a press release that it charged Alan Burak, the founder and sole member of purported “systemic asset management firm” Never Alone Capital LLC (“Never Alone”), with orchestrating a fraudulent scheme that amassed close to $4 million, the majority of which Mr. Burak used for personal expenses.

According to the complaint filed by the SEC, between at least 2018 and 2023, Mr. Burak ran a fraudulent operation in which he convinced investors to back Never Alone through a variety of false representations.  Specifically, Mr. Burak assured investors that Never Alone was a real investment fund, claimed himself to be a successful owner of a hedge fund, and misled investors to believe their money would be invested in “Wall Street” according to a sophisticated strategy, sometimes with promises of guaranteed returns.  In sum, Mr. Burak raised nearly $4 million from at least 17 investors, including some whom he met through a financial education company serving the Latino community.  Mr. Burak represented himself to be an investment “expert” and “coach,” presenting at numerous seminars, tutorials, podcasts, and live chats.  In these discussions, Mr. Burak claimed that Never Alone was a fund, hedge fund, or an investment fund and framed investment in Never Alone as a “special opportunity” for prospective investors.

Despite these representations, Mr. Burak regularly diverted investor funds for personal uses. These uses ranged from purchasing luxury skin care to an adult-only subscription service.  Mr. Burak repeatedly transferred funds from Never Alone to his personal bank accounts, including an account shared with his wife, and used investor funds to pay off his personal credit cards.

Moreover, according to the complaint, Mr. Burak sent fabricated account statements to investors that falsely showed positive returns, when investors were actually losing money. Mr. Burak eventually ceased communication with investors, when they began attempting to cash out their funds.

In July 2022, Mr. Burak made an audio recording to “take stock” of his business and set future goals in which he admitted that he had been lying and stealing funds from investors.  He confessed that he was “failing every day” and that he did not have a “real hedge fund.”  As of the filing of the complaint, investors in Never Alone have not recouped their initial investments, let alone the returns promised by Mr. Burak.

Samuel Waldon, the Acting Director of the SEC’s Division of Enforcement, stated that Mr. Burak “convinced investors to trust him by lying about his investment expertise and strategies and then stole their money,” as alleged in the SEC’s complaint.  He emphasized that the SEC “remain[s] committed to identifying and holding accountable those who prey on innocent investors” and “encourage[d] those who suspect they are victims of fraud to report it to the SEC.”

The SEC filed its complaint in the U.S. District Court for the Southern District of New York, charging Mr. Burak with violations of anti-fraud laws.  According to the press release, the SEC seeks to impose “permanent injunctions, disgorgement of ill-gotten gains together with prejudgment interest, and civil penalties, as well as conduct-based injunctions.”  The New York County District Attorney’s Office filed a parallel criminal charge against Mr. Burak on the same day.

What is Hedge Fund Fraud?

According to the SEC’s Office of Investor Education and Advocacy, hedge funds “pool investors’ money and invest the money in an effort to make a positive return.”  They typically have “more flexible investment strategies than, for example, mutual funds” and often “seek to profit in all kinds of markets by using leverage (in other words, borrowing to increase investment exposure as well as risk), short-selling and other speculative investment practices that are not often used by mutual funds.”  Hedge fund fraud occurs when a fund or a manager attempts to mislead investors.  Examples of hedge fund fraud include when managers misrepresent their experience or the fund’s track record, sending false account statements to investors, or Ponzi schemes, where returns to existing investors are paid through funds contributed by new investors.

What to Do If You Suspect You Have Been a Victim of Hedge Fund Fraud

The Financial Industry Regulatory Authority (“FINRA”) stresses the importance of learning your rights to better protect against potential investment fraud.  Resources such as the North American Securities Administrators Association’s “Investor Bill of Rights” can help victims learn about avenues for recourse.  Federal and state regulatory agencies, including the SEC, may also assist in this process. Those who suspect fraud can file a complaint with the SEC or FINRA.

The legal team at Miller Shah LLP has extensive experience representing securities fraud matters.  If you have any questions regarding this subject or this post, please fill out a form or call us toll-free at (866) 540-5505.