Securities and Exchange Commission v. Velissaris

Nature of the Document

The provided text is a letter from the Securities and Exchange Commission to Judge Castel. It asks the court to adjourn a May 2, 2025 pretrial conference and establish a schedule for the SEC’s anticipated motion for summary judgment. The text does not contain a court order or state that the court granted or denied the request.

Background

The SEC alleges that James Velissaris, described as the founder and former chief investment officer of SEC-registered investment adviser Infinity Q Capital Management LLC, participated in a scheme to overstate by more than $1 billion the value of assets held by a mutual fund and a hedge fund advised by Infinity Q. The SEC’s civil claims cite antifraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934 and Rule 10b-5, the Investment Advisers Act of 1940, and the Investment Company Act of 1940.

The SEC said the civil case arose from the same events as a related criminal case. According to the letter, Velissaris pleaded guilty on November 21, 2022, to one count of securities fraud under Section 10(b) of the Exchange Act and Rule 10b-5. Judge Cote sentenced him to 180 months in prison on April 7, 2023. The criminal court later entered an amended judgment imposing approximately $126 million in restitution and a $50,000 fine. The letter also states that Velissaris forfeited $22 million to the United States and that the Second Circuit dismissed his appeal on October 16, 2024. The SEC civil case had previously been stayed and was removed from the stay on November 21, 2024.

SEC’s Anticipated Motion

For liability, the SEC said it planned to argue that collateral estoppel—a rule that can prevent a party from relitigating issues already decided in an earlier case—bars Velissaris from contesting the alleged securities-law violations. The SEC also identified his guilty plea agreement and statements in the criminal proceeding as an independent basis for summary judgment, arguing that those admissions eliminate any genuine dispute about liability.

For remedies, the SEC said it planned to seek a permanent injunction against future violations of the cited securities laws. It also planned to seek a permanent bar preventing Velissaris from serving as an officer or director of a public company, arguing that the alleged fraud and his position at Infinity Q demonstrated that he was unfit for those roles. The SEC stated that its staff was considering how to proceed on disgorgement and a civil money penalty in light of the prison sentence, restitution order, and forfeiture order in the criminal case.

Requested Schedule and Status

The SEC requested the following schedule: its motion due June 20, 2025; Velissaris’s response due July 18, 2025; and the SEC’s reply due August 1, 2025. The letter states that Velissaris was incarcerated, was proceeding without counsel in this case, and consented to postponing the May 2 conference. It also states that settlement discussions had not produced an agreement.

Disposition

The provided text does not show Judge P. Kevin Castel issuing a ruling. It therefore does not establish whether the conference was adjourned, whether the proposed schedule was adopted, or whether the anticipated summary-judgment motion was later filed or decided.