Ifty Ahmed is a general partner with venture capital firm Oak Investment Partners, where he has led investments in such companies as Airespace (acquired by Cisco), GMarket (acquired by eBay) and Kayak (acquired by Priceline). Those deals should have helped make him plenty of money. But, as of today, Ahmed stands accused of participating in an insider trading scheme that netted him $1.1 million.
The Securities and Exchange Commission yesterday filed fraud charges against Ahmed in Connecticut district court. Also charged was Amit Kanodia, a longtime Ahmed pal who is described by the SEC as “an entrepreneur and private equity investor.”
Here is how the regulator sums up its case:
“The SEC alleges that by April 2013, India-based Apollo Tyres was engaged in serious negotiations to acquire Cooper Tire, of Findlay, Ohio. Although the acquisition was never completed, the complaint alleges that Cooper Tire’s stock price jumped 41 percent when the acquisition was announced in June 2013. The SEC alleges that Kanodia tipped Ahmed and another friend prior to the acquisition announcement after learning of the deal from his wife, then the general counsel at Apollo who was intimately involved in Apollo’s efforts to acquire Cooper Tire.
According to the SEC’s complaint, Kanodia shared the highly confidential information with Ahmed who began buying significant amounts of Cooper Tire stock and options. Once news of the deal was public, Ahmed immediately liquidated his Cooper Tire holdings, reaping more than $1.1 million of ill-gotten profits, according to the complaint. Ahmed later paid Kanodia a kickback by transferring $220,000 to Lincoln Charitable Foundation, a supposed charity that Kanodia controlled and used to mask the kickback, the complaint alleges.”
When the SEC charges someone with insider trading, there often is a corresponding settlement announcement. But not so in this case, with the SEC saying that its investigation is ongoing.
Ahmed has been with Oak since 2003, before which he spent time at Goldman Sachs and a venture capital unit of Fidelity Investments. The firm raised over $3 billion for two funds during his tenure, but last year chose to split up (which continuing to jointly manage out the legacy portfolio). Those focused on healthcare and financial technology subsequently raised a $500 million fund, while Ahmed was expected to be a partner with the group focused on information technology.
An Oak spokesman was just learning about the SEC charges when contacted by Fortune, and did not have any immediate comment. Several hours later, a rep from a different (and much larger) PR agency, offered the following statement:
“Mr. Ahmed’s alleged conduct has absolutely no connection to Oak Investment Partners or any of its portfolio companies. These allegations, which have just come to our attention, run counter to our culture and Mr. Ahmed has been placed on a leave of absence.”
The spokesman would not provide additional comment, such as if Ahmed would be replaced on the boards of Oak portfolio companies like Attivio Inc., Circle Financial, Kenet LLC and Nomorereack.com. As Oak’s statement suggests, it does not appear that either the firm nor Ahmed’s portfolio companies were aware that charges were pending. Ahmed himself — who happens to be a Term Sheet reader — has not returned an email request for comment. .
As for Amit Kanodia, it appears that he has spent the past two decades running a family investment office called Lincoln Ventures. He also is on the board of listed Indian infrastructure development company SPML India Ltd., and was a member of President Obama’s New England finance and steering committee. He also has been involved with the campaigns of several Massachusetts politicians, including former Gov. Deval Patrick, former Congressman William Delahunt and current Congressmen Michael Capuano.
• Speaking of litigation: Adam Levine yesterday filed suit against TPG Capital, arguing wrongful termination and violations of federal whistleblower laws. You might recall that Levine is TPG’s former managing director for global public affairs, who was fired in December and then sued by TPG for allegedly leaking confidential firm documents to the media.
Levine has not yet formally responded to TPG’s original complaint, but instead filed this new action which alleges that TPG fired him after he wouldn’t be quiet about what he considered to be two major breaches of fiduciary duty: (1) Telling LPs that the firm’s CIO began serving in the position two years than he actually had, in order to remove busted deals like WaMu from his track record; and (2) Allegedly attributing certain PR and other expenses to portfolio companies rather than to the fund, thus forcing LPs to pay the freight.
TPG, of course, denies Levine’s allegations (just as he denies TPG’s). It also is worth noting that Levine reached out to the SEC following his termination, and has an SEC attorney that differs from the one representing him on his litigation with TPG.
I’ll delve into this more online today, but here is my gut take: Large swaths of both TPG and Levine’s narratives aren’t actually all that inconsistent with one another (save for the leaking, or lack thereof). The devil is in which details each side chose to share. For now, you can find a copy of Levine’s complaint by going here.
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• Have a great weekend.
THE BIG DEAL
• SeatGeek, a New York-based mobile platform for sports and concert tickets, has raised $62 million in Series C funding. Technology Crossover Ventures led the round, and was joined by return backers Accel Partners, Causeway Media Partners and Mousse Partners. www.seatgeek.com
VENTURE CAPITAL DEALS
• VarageSale, a Toronto-based online marketplace for people to “buy, sell and connect with their local communities,” has raised US$34 million in new VC funding from Lightspeed Venture Partners and Sequoia Capital. www.varagesale.com
Shyp, an on-demand mobile app for shipping most anything, is raising $50 million in new funding at a valuation that could exceed $250 million, according to TechCrunch. Possible new investors include Kleiner Perkins. The company previously raised around $12 million from firms like Homebrew, SherpaVentures and Fresh VC. Read more.
• IronPlanet Inc., a Pleasanton, California-based operator of an online marketplace for used heavy equipment and trucks, has merged with Cat Auction Services, an alliance of Caterpillar and several of its independent dealers. No financial terms were disclosed. IronPlanet has raised over $70 million in VC funding from firms like Accel Partners, Kleiner Perkins, Caterpillar, Dyncorp, Marubeni Corp., IGNITE Group and Windspeed Ventures. www.ironplanet.com
PRIVATE EQUITY DEALS
• BlueLine Rental, a Shippensburg, Penn.–based equipment rental company owned by Platinum Equity, has acquired Area Equipment LLC, a Chesapeake, Va.-based rental company that serves customers in the industrial and non-residential construction markets. No financial terms were disclosed. www.bluelinerental.com
• Dicom Transportation Group, a Montreal-based portfolio company of Wind Point Partners, has acquired Modern Forwarding, an Ontario-based provider of truckload and less-than-truckload transport with emphasis on U.S.-Canada cross-border business. No financial terms were disclosed. www.windpointpartners.com
• Riverside Partners has acquired an undisclosed stake in R&D Altanova, a South Plainfield, N.J.-based supplier of turnkey interface solutions for the semiconductor industry. www.rdcircuits.com
• Rotunda Capital Partners has acquired a majority stake in Munch’s Supply Co. Inc., a New Lenox, Ill.–based HVAC distributor. No financial terms were disclosed. www.munchsupply.com
• Platinum Equity has acquired Ten Cate Enbi, a Shelbyville, Ind.–based provider of paper transport, fusing and image transfer rollers, from Royal Ten Cate (Amsterdam: KTC). No financial terms were disclosed. www.tencate-enbi.com
• TPG Capital has completed its previously-announced acquisition of Aptalis Pharmaceutical Technologies, a pharmaceutical outsourcing and R&D business in North America and Europe, from Actavis PLC (NYSE: ACT). No financial terms were disclosed. www.actavis.com
• Collegium Pharmaceuticals Inc., a Canton, Mass.-based developer of abuse-deterrent treatments for chronic pain, has filed for an $86.25 million IPO. It plans to trade on the Nasdaq under ticker symbol COLL, with Jefferies and Piper Jaffray serving as lead underwriters. The pre-revenue company has raised around $77 million in VC funding, including a $50 million round earlier this month. Shareholders include Longitude Capital Partners (22.37% pre-IPO stake), Skyline Ventures (20.04%), Frazier Healthcare (12.44%), TPG Biotech (8.68%), Boston Millennia Partners (7.77%) and RA Capital (6.08%), Adage Capital Management, Rock Springs Capital, EcoR1 Capital, Eventide Asset Management and Aperture Venture Partners. www.collegiumpharma.com
• Community Healthcare Trust, a Franklin, Tenn.-based REIT focused on acquiring non-urban healthcare properties, has filed for a $143.75 million IPO. It plans to trade on the NYSE under ticker symbol CHCT, with Sandler O’Neill & Partners and SunTrust Robinson Humphrey serving as lead underwriters.
• DavidsTea Inc., a Canadian retailer of tea and tea-related products, has filed for a $75 million IPO. It plans to trade on the Nasdaq under ticker symbol DTEA, with Goldman Sachs and J.P. Morgan serving as lead underwriters. The company reports $11.4 million of net income on $142 million in revenue for 2014, compared to a slight net loss on $108 million in revenue for 2013. Shareholders include Highland Consumer Partners (20.8% pre-IPO stake). www.davidstea.com
• Check Point Software Technologies (Nasdaq: CHKP) has agreed to acquire Lacoon Security, a mobile security company with offices in Israel and San Francisco, for a reported $80 million. Lacon had raised $8 million in VC funding led by Index Ventures. Read more.
• LinkedIn (Nasdaq: LNKD) has acquired Refresh.io, a Palo Alto, Calif.-based mobile app that provides “an instant dossier about people you meet.” No financial terms were disclosed. Refresh.io had raised $10 million in VC funding from Redpoint Ventures, Charles River Ventures and Foundation Capital. Read more.
• Belk Inc., a family-owned department store chain based in Charlotte, has hired Goldman Sachs to explore strategic alternatives, including a possible sale of the company, according to Reuters. Belk could be valued at upwards of $4 billion (including debt), and is expected to receive both strategic and private equity interest. Read more.
• Diageo (LSE: DGE) has acquired the remaining 50% stake of South African beer-maker United National Breweries for $36 million. Read more.
• DP World has agreed to acquire the Fairview Container Terminal (British Columbia, Canada) from Deutsche Bank for C$580 million. Read more.
• Playtech (LSE: PTEC) has agreed to acquire a majority stake in TradeFX, a UK-based foreign exchange trading platform and payment services provider, in a deal valued at upwards of €458 million (including earn-outs). Read more.
FIRMS & FUNDS
• The Carlyle Group has quietly held a $1 billion first close on its second mid-market buyout fund, which is expected to raise a total of between $2 billion and $2.3 billion. Read more.
• Cerberus Capital Management is seeking to raise more than $3 billion for its next flagship private equity fund, which will focus on distressed assets, according to Reuters. Read more.
• Freestyle Capital, a San Francisco-based seed investment firm, has closed its third fund with $60 million in capital commitments. It also has added a third partner: Jenny Lefcourt, co-founder of WeddingChannel.com and Bella Pictures. Read more.
• India Value Fund Advisors, an Indian private equity firm, said that it has raised $500 million for a new mid-market fund. The overall target is $700 million, which IVFA said it expects to reach within the next 90 days. www.ivfa.com
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