David Choi's hedge fund seemed too good to pass up, with Mars FX US LP posting annual gains that averaged 19% and zero monthly losses. In the end, it was too good to be true.
Choi's fund is now bankrupt, almost $600 million has gone missing, and a global hunt is underway for the money and whom to blame. A criminal fraud inquiry has been opened in the U.S., and lawsuits are pending in at least three nations, with some alleging forgery and money laundering. The blue-chip auditing firm of Deloitte is being sued after signing off on the fund's financial statements before its collapse in 2025.It's the latest example of investors getting burned in an era when the hedge fund industry and policymakers are pushing for far fewer rules and disclosures. Just this week, U.S. regulators proposed
Nobody understood the product, to be honest,'' said Jens Blomeyer, 51, an investor and entrepreneur in Germany who invested $125,000. "We saw the returns, and we got blinded and greedy." U.S. prosecutors in Manhattan, the Federal Bureau of Investigation and a grand jury have sought information about Mars FX, its sponsor Novus Capital Partners and the circumstances surrounding the fund's collapse, according to documents reviewed by Bloomberg. The matter also was referred to the Securities and Exchange Commission, the Commodity Futures Trading Commission and civil regulators in the U.K. and the British Virgin Islands, Novus told investors in emails. Novus says it's trying to recover the missing money, casting blame on a tech company Novus says it employed. The tech company in turn claims its platform had stopped operating back in 2022 and never agreed to work with Mars FX.
More than 500 investors were listed as creditors in a March 24 bankruptcy filing by Los Angeles-based Mars FX. Founded in 2020, it attracted money from across the U.S., Europe and Asia, including family trusts, retirement accounts and even some private equity professionals. They were drawn to the promise of steady returns from a complex combination of long and short positions in currency pairs, as well as gold. By February 2024, Novus had raised $331 million for Mars FX US LP, according to an SEC filing. Their money was invested in Mars FX or a related international fund by Novus, a firm controlled by Choi, Ashish Patel, Patrick Hofmann and Choi's brother Jae, each with a 25% stake, court records show. Clients came through Choi, friends or registered investment advisers, according to more than two dozen investors who spoke with Bloomberg News.
Federal prosecutors, the FBI, U.S. regulators and the U.K.'s Financial Conduct Authority all declined to comment. BVI officials and Deloitte didn't respond to messages. Authorities haven't formally accused anyone of crimes, investigations don't always lead to charges and none of the parties has admitted to wrongdoing.
Bloomberg reached out to the four Novus principals. In an emailed statement provided by David Choi, Novus said it's "working to secure the return of investor funds from the counterparties holding them since the fall of 2024." It's cooperating with criminal and civil authorities in the U.S. and overseas, filed suit on behalf of investors and hired advisers specializing in recovery efforts, the firm said. "Novus's principals are investors in the Mars Funds and have suffered significant losses due to the wrongdoing'' by its technology partner.
Mars offering
The Mars managers had solid credentials. Choi, a Wharton graduate, worked at Donaldson, Lufkin & Jenrette, as well as TPG Capital, according to his biography. He also helped start Principia Capital, an equity futures manager, before starting Novus Capital Partners with three others.
Patel worked at Merrill Lynch in Australia before co-founding Indus Coal Ltd., a public company, his biography said. In 2017, he co-developed the Mars FX trading system.
Novus told investors their money would go to a Mars master fund and placed with a technology partner regulated in the BVI, according to an April 2022 private placement memorandum. That partner would route and consolidate trades, and Novus would use regulated brokers outside the U.S., the memo said. But the identities of the partner and brokers were "proprietary and sensitive,'' and weren't disclosed.
The document did name the auditor, Deloitte, which said in annual audits between 2020 and 2023 that Mars presented its financial statements fairly. Deloitte issued "clean opinions without independent verification of the assets held by" the technology partner, according to a Delaware investor lawsuit. The suit was filed in March by an investor identified as Cohen New York Inc. Deloitte hasn't responded in court to the lawsuit or to multiple requests for comment from Bloomberg.
The Deloitte name gave some investors comfort, and so did the track record in fund documents of zero monthly declines for four years – an unusual feat that could have served as a warning, given how hard it is for managers to sustain unbroken gains over a long period. Before the fund imploded, some investors received regular distributions, they said in interviews.
By 2024, the Mars principals themselves had taken $22 million in fees, according to the Cohen lawsuit. Along the way, Novus and Mars sponsored an auto racing team, which entered races around the world that featured 500-horsepower cars. Patel, using the name "Hash,'' raced with a professional driver. The team's website said they drove a Porsche 911 GT3, and it showed a car emblazoned with Novus logos on the hood and side door. In 2024, the team won the ProAm division of the International GT Open in Barcelona. It's unclear whether Novus and Mars used investor money to sponsor car racing.
Behind the scenes, cracks were emerging between Novus and the tech partner, Tech RealFX Ltd., or TRFX, a BVI company founded
But court records in the BVI offer conflicting accounts about what TRFX did for Mars, and whether Novus could have known something was amiss. For its part, TRFX says in court papers it didn't do anything wrong, and argues that Novus and Mars were at fault.
Back in 2023 — while TRFX was handling money for Mars — a separate firm tied to Patel was managing money on behalf of other investors and also using TRFX, according to court records. The firm, Spread Research & Trading, listed Patel's wife as the majority owner. When Spread tried to pull its $91 million investment plus trading profits from the TRFX platform in late 2023, TRFX denied the request. A Spread official was told that TRFX was reducing redemptions because of "major challenges in the global operating environment.'' Spread sued TRFX in mid-2025 to get its money back, claiming breach of fiduciary duty and unjust enrichment. That case is still pending in the U.K., and TRFX hasn't responded to the suit's specifics.
Still, Novus pushed ahead with fundraising in 2024.
Liquidity dries up
The previous offering documents in 2022 — the ones that didn't name TRFX and its two brokers based in the UK and Australia — had said Novus's tech partner was regulated by the Financial Services Commission in the BVI. The new 2024 batch of offering documents still didn't name TRFX, but they showed, according to the Cohen lawsuit, that the tech partner was "neither a licensed broker nor a regulated custodian.''
Deloitte's audit of 2023 results nevertheless noted no significant changes, the lawsuit said.
By November 2024, for reasons that aren't clear, Novus asked TRFX to redeem its investor money and purported trading profits. TRFX refused, according to Novus's lawsuit in the BVI. Novus soon warned investors the following month that it "misjudged the fund liquidity'' and couldn't recall funds to meet its obligations.
Weeks later, investors received shocking news. Novus said it would be "taking steps to wind down funds,'' according to a January 2025 email. A Hong Kong money-laundering investigation had "created unforeseen challenges'' that prevented transfer of the funds according to its tech partner, Novus said. The email didn't elaborate on the nature or target of the probe, but said its tech partner was working with authorities to resolve the matter.
Novus assured investors it would try to recover their money. To show "confidence in the integrity of the fund's assets,'' the four Novus principals and their families agreed to recoup their investment after all other investors.
In a February 2025 email to Mars investors, Novus said it had notified the SEC and the CFTC of the situation. Investors didn't learn until another email in March 2025 that the tech partner was TRFX. In June 2025, Mars filed a claim against TRFX in a BVI court, saying TRFX owes Mars $598 million – the $277 million invested and the profit made through trading.
Unauthorized party
TRFX responded in court papers that Novus dealt with someone who didn't have any authority to enter into agreements on behalf of the firm — and that he had forged correspondence and broker statements. What's more, TRFX said its platform had stopped operating in October 2022, that it didn't have a license to perform the purported tasks and Mars could have easily found this out. The Mars claimants "are not entitled to anything from TRFX,'' it said. Tan Jit Chun, identified in court papers as TRFX's leader, declined to comment to Bloomberg.
Investors say they've struggled for 15 months to get clear answers from Novus.
Some told Bloomberg they did get cash from distributions and redemptions before everything fell apart. But the Cohen lawsuit contends that those weren't based on real profits, because TRFX said "all trading activity on the platform ceased in October 2022. In turn, that means the gains and balances reported for at least the final quarter of this fiscal year, and the $248 million year-end balance, may have been wholly or partly fictitious.''
Brian Powers, a Mars FX bankruptcy attorney, said the stakes are high. "There's a lot of money on the line and a lot of investors out there,'' he told a bankruptcy judge at a New York hearing last month. "They are quite upset about the money somehow disappearing. These are people of means, so the potential for litigation is extremely high here.''
In the hunt for the missing cash, liquidators were appointed in the Cayman Islands, where two of the Mars funds are based. They're seeking books and records, tracing assets and working with lawyers in the U.S., BVI, Cayman Islands and Hong Kong, according to a March 24 bankruptcy court filing by Luke Furler, the chief restructuring officer for Mars FX US and one of the liquidators of two related funds.
Without access to better records, Furler wrote, he "cannot state precisely what cash, if any, is immediately available.'' Liquidators are also investigating potential breach of contract claims against Deloitte over the 2022 and 2023 audits, Furler wrote. A response by Deloitte to Cohen's lawsuit is due next month.
The Cohen lawsuit — which seeks class-action status — claims Deloitte aided and abetted a breach of fiduciary duty by Novus and its principals. Deloitte failed to identify, or ignored, "multiple fraud risk factors'' before delivering several clean audits, according to the lawsuit. Investors interviewed by Bloomberg doubt they'll see their money again.
"They were paying for a while and all of a sudden, it stops," said CarolAnn Tutera, a small business owner in Scottsdale, Arizona, who heard of Mars from a relative. "I never thought they would claim bankruptcy. That was a shocker to me."
Tutera, 70, who was swindled in the
