Sid Jawahar (also known as Siddharth Jawahar) was sentenced to eleven years in prison for three counts of wire fraud and ordered to pay $31.35 million in restitution to victims. He pleaded guilty in January this year. Prosecutors stated that from July 2016 to December 2023, Swiftarc Capital raised over $35 million from investors, but only about $10 million was actually invested.

The indictment noted that starting in 2015, he concentrated almost all funds into Philip Morris Pakistan, and after the stock price fell, he was unable to pay back redeeming investors, resorting to using new funds to pay old investors while maintaining expenses for private jets, hotels, and memberships. In June 2022, Texas securities authorities ordered the hedge fund to cease fraud and discovered that holdings were exaggerated, leading to federal charges the following year. The court mentioned NFL player Travis Kelce as one of the victims, but did not disclose the amount of his losses; prosecutors stated there were approximately 64 victims in total.

According to Axios, Jawahar also raised venture capital funds under the name Swiftarc Ventures, employing a real team and investing in startups in beauty and health, but a large amount of funds were used to repay hedge fund investors and for his personal expenses. Former employees claimed the venture capital team was unaware that funds were being misappropriated at the time. Relevance Ventures once took over two funds; the late partner Fred Goad had been listed as a stakeholder in Swiftarc since 2013. Relevance did not respond to requests for comment.

The hedge fund was established at the end of 2010, targeting frontier market stocks, with fundraising led by Jawahar, while investment sourcing was handled by former UTIMCO analyst Siamc Kamalie. Prosecutors stated that the failure to begin repayments was a significant factor in sentencing. It remains uncertain whether the repayments can be fulfilled.

This is a judicial liquidation following a breakdown in repayments. The buyers are old investors seeking redemption and celebrity accounts recorded in court, while the sellers are channels continuing to inject money under new fund names. Funds were transferred from a single stock in Pakistan, appreciating on paper, to lifestyle and hedge fund repayments, and partially into seemingly legitimate startup portfolios; beneficiaries are early investors who have cashed out or been prioritized for repayment, while the burden falls on later investors under the venture capital brand and publicly named celebrity investors. The venture capital shell extended the funding chain and also involved the startup team in an unaware intermediary layer.

Source: Public Information