Arshack, Hajek & Lehrman

United States v. Chetan Kapur

Hedge fund manager walks after fraud charges dropped

We defended Chetan Kapur, the smart, creative young man behind ThinkStrategy, a New York hedge fund.

When the market crashed in 2008, some of Mr. Kapur’s investors absorbed significant losses, as did virtually every other investor in America. In an effort to recoup their losses, a group of powerful investors blamed Mr. Kapur for the diminished value of their portfolios. Ultimately, he was indicted on federal security fraud charges, with great fanfare by the New York United States Attorney’s Office.

We took the time to learn the arcane and highly technical nature of Mr. Kapur’s business. After several months of close analysis, we were able to demonstrate to and convince the federal prosecutors that, far from defrauding anyone, Mr. Kapur made money for most of his investors, while only those who had timed their investments poorly (i.e. by buying into the fund when it was doing well and selling when it was down) lost money.

The prosecutor ultimately dismissed all of the fraud charges. ■

Mr. Kapur never defrauded anyone. He invested his clients’ funds exactly as he promised he would and paid them precisely what they were entitled to receive when they redeemed their investments. Most of his clients made money and those who didn’t understood the risks of investing. The charges against Mr. Kapur were ill conceived and we are grateful that the United States Attorney recognized that fact by dismissing them.Daniel N. Arshack
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