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Investors represented by RKS pursuing securities claims arising from the collapse of the Infinity Q Diversified Alpha Fund will have the opportunity to present their case against the sponsor of that mutual fund to a jury, following a New York court’s denial of the sponsor’s motion for summary judgment this week.
The Infinity Q mutual fund was shuttered by the SEC in February 2021 after it determined that the Chief Investment Officer of the fund—James Velissaris—had been fraudulently inflating the values of the fund’s assets for several years. In 2022, Velissaris pled guilty to securities fraud and currently is serving a 15-year prison sentence in a federal penitentiary. Meanwhile, investors in the mutual fund suffered significant investment losses as a result of the fraudulent scheme.
Invoking the remedial provisions of the Securities Act of 1933, numerous investors represented by RKS sued the purported gatekeepers of the mutual fund in New York state court, including the mutual fund’s sponsor and administrator. RKS argued that the sponsor is liable for the investor losses because it exercised control over the fund through, among other things, installing its own employees as officers of the fund, preparing and filing the fund’s registration statement (which contained the alleged misstatements), and providing critical services to the fund. The sponsor, for its part, argued that the fund was controlled by its independent board of trustees, and sought dismissal of RKS’s clients’ claims on summary judgment.
On March 9, 2026, the Honorable Melissa A. Crane of the Supreme Court of New York, New York County, heard oral argument and ruled from the bench that the sponsor was not entitled to summary judgment and the cases can proceed to trial. The Court also denied the sponsor’s motion to exclude RKS’s industry expert and granted RKS’s motion to preclude the sponsor from relying on evidence previously withheld as privileged.
The cases are pending in the Commercial Division of the Supreme Court of New York, New York County, under the case names: The Glenmede Trust Company, N.A. v. Infinity Q Capital Management LLC, et al., Index No. 160830/2022; Carson Family 2013 Dynasty Trust, et al. v. Infinity Q Capital Management LLC, et al., Index No. 160834/2022; and Flint Hills Diversified Strategies L.P., et al. v. Infinity Q Capital Management LLC, et al., Index No. 160964/2022.