A Bahamian brokerage and its president enabled a Ponzi scheme that cost investors at least $45 million by falsely claiming to have custody of the scheme's assets under management (AUM), the Securities and Exchange Commission alleged on Friday. In September 2012 a Chicago federal judge halted the alleged scheme by freezing assets held by Nikolai Battoo, a global fund manager who claimed his clients had avoided losses in the financial crisis through his investment acumen. Battoo bolstered his fraudulent claims by hiding investment losses and by inflating his AUM, the SEC and the Commodity Futures Trading Commission countered in separate court filings at that time. "Battoo attracted quite a following of investors by proclaiming his investments withstood the test of the financial crisis, but reality seems to have finally caught up with him. Now, Battoo is offering investors one excuse after another for holding their money hostage," said then-SEC enforcement director Robert Khuzami. Battoo
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