How to use a stock exchange stash to invest your money
Investment companies and the Securities and Exchange Commission are scrambling to respond to the fallout from the recent scandal over their own stash of funds.
StashInvest, a brokerage company based in Massachusetts, has been the target of regulatory scrutiny since it was revealed that its stock portfolio contained tens of millions of dollars in investment funds that were not properly accounted for.
It also had been the subject of investigations by the SEC and other agencies.
Stashed funds have come under scrutiny as a result of the scandals that rocked hedge fund firms such as Blackstone, which was shut down and its portfolio was frozen.
The Securities and EXchanges Commission says it has opened investigations into several investment companies that have invested in hedge funds and other financial companies, including the funds of investment companies of StashInvest.
A spokeswoman for the SEC said the agency is “reviewing the information” provided by the companies.
The SEC did not respond to a request for comment on the companies or to a list of investors who are being investigated.
Investment companies, in addition to hedge funds, have been a target of regulators.
They often are not required to report the funds they invest and may not be able to track down investors who have been charged with money laundering.
In March, the SEC announced that it would close down StashFunds, which it says had “significant market risk” in its holdings.
The agency also shut down Stapelfunds, a fund run by investment companies in London, and its counterpart in the United Kingdom, Stash Capital, which has about $100 million in assets.
The two funds were closed as part of the SEC’s crackdown.
The fund-dodging scandals also have affected the money of other investment companies.
In November, Blackstone and its partner, UBS AG, announced they were closing Stash Investment, a portfolio that included about $150 million in investment companies including Vanguard Group, BlackRock, and J.P. Morgan Chase & Co. The investment companies are known as “stash” companies.
Blackstone, in a statement, said the fund had “sustained substantial market risk in its portfolio of investments” and was “reviewed for compliance.”
Blackstone said it would “provide further guidance to the SEC as to what additional action is required and, in the case of further potential violations, will be conducting additional review.”
The SEC has not commented on the pending Stashinvest investigations.
In addition to Blackstone’s and Stash Investors’ holdings, the two other funds that the SEC has closed include two that have previously received SEC scrutiny.
The securities watchdog has previously accused Blackstone of using Stash Invest funds to invest in a scheme that defrauded investors in which the fund invested in investments that the fund did not own.
Blackstone has denied the allegations.