Ex-Apollo Partner Rashid Said to Charge Expenses in SEC Case

(Bloomberg) -- The former senior partner at Apollo Global Management LLC regulators accused Tuesday of charging personal expenses to the firm’s clients over multiple years is Ali Rashid, according to two people with knowledge of the matter.

The Securities and Exchange Commission is weighing whether to sue him for violating federal securities laws, said the people, who spoke on the condition of anonymity because Rashid wasn’t named in the agency’s enforcement case against Apollo.

Rashid, who left the private equity firm in 2014, didn’t respond to requests for comment. SEC spokeswoman Judy Burns declined to comment.

The allegations involving Rashid are laid out in a broad settlement with Apollo in which the firm will pay $52.7 million to resolve claims that it misled investors about fees. While Apollo didn’t admit or deny wrongdoing, its accord is the biggest yet stemming from an industrywide SEC investigation into whether private equity firms put their own interests ahead of clients.

‘Fabricated Information’

Rashid, 40, saddled Apollo-advised funds with personal expenses from January 2010 to June 2013, and concealed his conduct by submitting “fabricated information,” according to the SEC’s order. A secretary became suspicious of his expense reports in October 2010 and reported him to a manager. The next month, Rashid admitted he improperly charged personal expenses, and reimbursed Apollo, which reprimanded him for his conduct.

Based on new questionable expenses, in early 2012, Apollo started another review and again found personal expenses charged to the firm. Rashid repaid those expenses and Apollo issued another verbal warning.

In August of that year, Apollo began a firm-wide review of expense allocations and found further improper charges by Rashid. Apollo then placed him on unpaid leave in July 2013. Rashid paid all the expenses back in January 2014 and subsequently left the firm that month.

Deals Rashid worked on included the firm’s investments in real estate brokerage operator Realogy Holdings Corp., Countrywide Plc, Metals USA Holdings Corp., Noranda Aluminum Holding Corp. and Quality Distribution Inc. Rashid joined New York-based Apollo in 2000 from Goldman Sachs Group Inc., where he worked in the financial institutions group investment banking unit.

To contact the reporters on this story: Matt Robinson in New York at mrobinson55@bloomberg.net, Devin Banerjee in New York at dbanerjee2@bloomberg.net. To contact the editors responsible for this story: Jesse Westbrook at jwestbrook1@bloomberg.net, Alexis Leondis