The watchdog used a forensic accountant to uncover the alleged malpractice.

Wall Street's main watchdog has charged a former private equity firm partner with defrauding clients after he allegedly billed them around $290,000 for family vacations, haircuts and designer clothes.

The Securities and Exchange Commission alleged that Mohammed Rashid, a former senior partner at Apollo Management, told clients that “certain individuals” joined him at dinners to make it seem like various personal expenses had a business purpose. He doctored a receipt in a bid to justify his purchase of a $3,500 suit for his father as a business expense, the regulator said. 

“As alleged in our complaint, despite earning millions of dollars, Rashid used client money to fund his lifestyle and personal expenses, including family vacations, designer clothing, and spa services,” said Anthony Kelly, co-chief of the SEC Enforcement Division’s asset management unit. “Rashid knew what he was doing was wrong because he took active steps to conceal his misconduct.”

According to the SEC’s complaint, despite being caught by the firm and told to stop on two occasions in 2010 and 2012, Rashid continued to expense personal items to clients into 2013.  After he was confronted about his expenses for a third time, Rashid admitted that he had charged approximately $220,000 in personal expenses.  

A forensic accountant then uncovered additional personal expenses that Rashid improperly charged to clients, the SEC said.