More in this Section

Ofer Abarbanel

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 26494 / February 27, 2026

Securities and Exchange Commission v. Ofer Abarbanel et al., No. 21-cv-05429 (S.D.N.Y. filed June 21, 2021)

SEC Obtains Final Consent Judgment as to Alleged Orchestrator of $100 Million Fraudulent Scheme Involving Two Mutual Funds

On February 25, 2026, the United States District Court for the Southern District of New York entered a final consent judgment as to Ofer Abarbanel, the manager of two mutual funds: the Income Collecting 1-3 Months T-Bills Mutual Fund and the State Funds – Enhanced Ultra-Short Duration Mutual Fund. The Securities and Exchange Commission previously charged Abarbanel and others with an alleged scheme to defraud investors in these two mutual funds.

As alleged in the SEC’s amended complaint, Abarbanel diverted fund assets to shell companies under his control using unauthorized, uncollateralized loan transactions that violated the terms set forth in the funds’ public filings, prospectuses, and other documents issued to investors. The SEC charged Abarbanel and others with violating the antifraud provisions of the federal securities laws, named as relief defendants six companies that had received investor assets in furtherance of the scheme, and obtained an asset freeze to safeguard the remaining investor funds. The SEC previously reached settlement agreements with two of the co-defendants in this matter, returned the frozen assets to harmed investors, and dismissed the action against one co-defendant and the six relief defendants. The U.S. Attorney’s Office for the Southern District of New York also charged Abarbanel with defrauding investors in a parallel criminal case. Abarbanel pled guilty in September 2022 and was later sentenced to four years in prison and ordered to forfeit and pay restitution to victims in the amount of $106 million.

The final consent judgment permanently enjoins Abarbanel from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 thereunder, Sections 206(1), (2), and (4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder, and Section 34(b) of the Investment Company Act of 1940. The judgment further orders disgorgement in the amount of $106,530,000 plus prejudgment interest in the amount of $3,639,277, offset by $88,785,385 collected through the asset freeze and returned to investors, with the remaining amount deemed satisfied by the criminal forfeiture and restitution orders entered against Abarbanel by the United States District Court in United States v. Abarbanel, No. 21-cr-532 (S.D.N.Y.). The final judgment imposes no civil money penalty against Abarbanel in light of his conviction and sentence in the parallel criminal action.

The Commission also instituted a settled follow-on administrative proceeding barring Abarbanel from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.

The SEC’s continuing litigation is being conducted by Derek Bentsen under the supervision of James Carlson, with the assistance of investigative staff Alexandra M. Arango, David Becker, Gregory Padgett, and Virginia M. Rosado Desilets. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York, the U.S. Postal Inspection Service, and the Cook Islands Financial Intelligence Unit.

Resources

• Final Judgment
• Order Instituting Proceedings