A private equity red flag | Asia Asset Management

The head of a Florida-based mid-market private equity firm has been charged in a Manhattan federal court for fraudulently obtaining a US$95 million loan from Silicon Valley Bank by claiming that prominent investors, including New York University and University of Miami endowment funds, had agreed to make substantial investments into his fund. Elliot Smerling, chief executive officer of JES Global Capital, allegedly obtained a $150 million credit line from the bank, $80 million of which still has to be repaid, by forging or falsifying subscription agreements from limited partners totalling $500 million. Readers with memories long enough to reach back…