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The SEC has made hedge fund fraud and insider trading cases enforcement priorities. They have been able to kill two birds with one stone with a recent case alleging insider trading by a hedge fund manager. Read the SEC’s press release.
With the millions he raised through a Ponzi scheme, Bob McLean made big donations to his alma mater, Middle Tennessee State University, and the Country Music Hall of Fame. McLean committed suicide last year after investors filed an involuntary bankruptcy suit against him. Fifty-five of McLean’s investors are finding out now that the loss of their nest eggs may not be the end of the trouble McLean has caused them. Read the rest of this entry »
The Securities and Exchange Commission (SEC) has charged three south Florida physicians - Dr. Zachariah P. Zachariah, Dr. Mammen P. Zachariah, and Dr. Sheldon Nassberg - with reaping more than $500,000 through illegal insider trading. Specifically, the SEC claims that Dr. Z. Zachariah was a member of the Board of Directors of IVAX, Inc. when he learned of an offer to acquire that company. “Within minutes” of learning that information, according to the SEC, Dr. Z. Zachariah began buying IVAX stock (he ultimately bought 35,000 shares at a cost of approximately $730,000). Read the rest of this entry »
Marie Vasari and Jim Johnson of the Monterrey Herald have written an article about the aftermath of a Ponzi scheme allegedly operated by David Nilsen and his California-based company - Cedar Funding Inc. Vasari and Johnson convinced a few investors to talk on the record. Others were too humiliated to allow the use of their names. All of them allege that what they thought was a safe investment guaranteeing a return of almost 11 percent was actually an elaborate Ponzi scheme. Many have lost their entire retirement savings. Read the rest of this entry »
The Securities and Exchange Commission (SEC) has shut down another offering supposedly earning profits from foreign currency trading. The SEC claims that Gregory N. McKnight (McKnight) and Legisi Holdings, LLC (Legisi Holdings) raised more than $72 million from more than 3,000 investors in all fifty states and several foreign countries by promising returns of as much as 15% per month. The SEC claims that the offering was a classic Ponzi scheme, with the defendants using amounts invested by later investors to pay earlier investors supposed distributions. Read the rest of this entry »
The U.S. Securities and Exchange Commission (SEC) has charged three medical technology companies, each of the CEO’s, and the companies’ lawyer for failing to use the proceeds of a securities offering as described in the offering materials. Specifically, the SEC clams that the companies - all based in California - paid 25% commissions to salespeople who sold stock to the public, when the offering documents provided for only a 12% commission. The companies and their CEO’s are Intracom Corporation (Alfred Braunberger), Hyperbaric Systems, Inc. (Harry Masuda), and Surgica Corporation ( Louis Matson). The attorney charged is Paul Marotta. Read the rest of this entry »
The Securities and Exchange Commission (SEC) has charged Las Vegas-based Gold-Quest International and its principals, David M. Greene, John Jenkins, and Michael McGee with running a Ponzi scheme and misappropriating investor funds. A federal judge in Las Vegas has granted the SEC’s request for a temporary restraining order and an asset freeze against the defendants. Read the rest of this entry »
The FBI has arrested Christopher M. Pearson, 48, of
The Securities and Exchange Commission (SEC) has charged San Diego-based investment adviser Plus Money, Inc. and its president, Matthew La Madrid, with securities fraud in coonection with several hedge funds they operated. Specifically, the SEC claims that La Madrid and Plus Money raised $30 million from over 300 investors by telling them that they would make money through a covered call options trading strategy, but that the defendants abandoned that strategy, emptied the hedge fund brokerage accounts, and sent the money to other entities they controlled. Read the rest of this entry »
National Century Financial Enterprises (NCFE) grew rapidly, purportedly by buying and collecting the receivables of health care providers and keeping a percentage. In 2002, though, allegations emerged that NCFE was making improper payments to health care providers in which it owned an interest and that the company’s officers were siphoning off investor money to support extravagant lifestyles. The Columbus Dispatch reported: Read the rest of this entry »
