Investor's Watchdog.com: Stock, finance and investment protection for investors

The U.S. Securities and Exchange Commission (“SEC”) has charged Alan Todd May, whom it describes as “a felon with a long criminal history of theft and fraud,” with raising more than $6 million in a fraudulent scheme involving sale of unregistered interests in oil and gas properties.  According to the SEC, May operated the scheme through Prosper Oil and Gas, Inc. a/k/a Prosper Energy, Inc.  According to the SEC’s complaint: Read the rest of this entry »

Sean David Morton calls himself “America’s Prophet.”  He claims to be psychic, but he may not have foreseen the U.S. Securities and Exchange Commission’s (“SEC) enforcement action accusing him of fraud.  The SEC claims that Morton made “numerous materially false representations relating to his psychic abilities in order to solicit investors for” several entities he and his wife own.  The companies involved are Vajra Productions, LLC, 27 Investments, LLC, and Magic Eight Ball Distributing, Inc.  The Mortons operated them all under the umbrella of a parent company called the Delphi Associates Investment Group (Delphi Investment Group).   According to the SEC: Read the rest of this entry »

The U.S. Securities and Exchange Commission (“SEC”) has taken emergency action to shut down another alleged Ponzi scheme, this one targeting retired bus drivers in the Los Angeles area.  According to the SEC, “Thomas L. Mitchell, (“Mitchell”), through his investment advisory firm Mitchell, Porter & Williams, Inc. (“MPW”), operated two entities, the Adivanala AA Investment Trust (the “AAA Trust”) and AB3, Inc., (“AB3″), which collectively raised at least $14.7 million from 82 MPW clients nationwide.”  The SEC’s complaint state that: Read the rest of this entry »

The U.S. Securities and Exchange Commission (“SEC”) has charged Gaston E. Cantens and Teresita Cantens of Miami with defrauding more than 400 investors out of more than $135 million in a Ponzi scheme aimed at Cuban-Americans. The Cantens founded and owned Royal West Properties, Inc. (“Royal West”), a Miami-based real estate development company.  According to the SEC the defendants raised money by selling promissory notes supposedly backed by mortgage assignments.  In some cases, the Cantens signed personal guarantees backing the promissory notes.   The SEC’s complaint alleges that: Read the rest of this entry »

Your investment adviser is registered with the U.S. Securities and Exchange Commission (“SEC”).  Your money must be safe, right?  That is not a safe assumption. Read the rest of this entry »

In February 2009 we posted about George Georgiou, accused of manipulating the market in the securities of four micro-cap companies:  Avicena Group, Inc., Neutron Enterprises, Inc., Hydrogen Hybrid Technologies, Inc., and Northern Ethanol, Inc.  Last week a federal jury convicted Georgiou on criminal charges stemming from the same conduct alleged by the SEC.  The SEC’s press release summarizes the allegations against Georgiou: Read the rest of this entry »

The U.S. Securities and Exchange Commission has charged Daniel Bonventre with assisting in Bernard Madoff’s record-setting Ponzi scheme. According to the SEC, Bonventre was Director of Operations at Bernard Madoff Investment Securities (“BMIS”) and knew that Madoff was not purchasing securities for investor accounts. The SEC alleges:

Bonventre was responsible for the firm’s general ledger and financial statements that were materially misstated because they did not reflect the manner in which investor funds were maintained and used. Bonventure ensured that BMIS financial reports did not reflect the firm’s massive liabilities to investors or the corresponding assets received from investors. To hide the fact that BMIS normally operated at a significant loss, the firm used more than $750 million in investor funds to artificially improve reported revenue and income.

The SEC alleges that Bonventre also helped Madoff, his lieutenant Frank DiPascali, Jr., and others orchestrate lies to investors and regulators when investment advisory operations at BMIS came under review. With Bonventre’s assistance, they made serial misrepresentations to external reviewers by manufacturing reams of false reports and data.

Why don’t people blow the whistle on scams run by their employers? Because of the paycheck. That is why it is never safe to assume that a large operation is a legitimate operation. A handful of people with knowledge, all of them afraid to lose their incomes, can create a scam that lasts for decades and robs thousands of everything they have worked and saved for.

The UK’s Financial Services Authority is warning investors about a new tactic used by boiler room stock operations, which use high pressure sales tactics to force risky securities onto unsuspecting investors.  According to the FSA, unscrupulous operations are posing as brokerage firms that are authorized by the FSA.  The illegitimate operation may even clone the website of an authorized firm, changing only the telephone number and address, to fool investors.  The FSA advises:

Should anybody receive an unsolicited call or email from a firm which they are not a customer of, the FSA is recommending that people should take the following steps:

• ask for the contact details of the person calling you;
• check the firm or individual’s status on the FSA register;
• call the firm back on the switchboard number provided on the FSA register to make sure that the call came from the legitimate authorised firm.

Anybody who has been contacted by a suspicious firm or has any doubts should report the encounter as soon as possible by calling the FSA on 0300 500 5000 or reporting it online.

This warning from the FSA points out the challenge facing every investor: knowing who to trust.  Every scam artist portrays himself as someone he is not.  This is just the latest variation of that practice.  If all you know about a broker is what you learned from him or what you read on a website he or his employer created, you are at great risk of losing everything you have worked and saved for.  Learn what the broker his not telling you by asking an investor protection company to do a pre-investment investigation.

Scott Frye left the United States shortly after Alabama regulators charged him with defrauding several Alabamians out of their retirement savings.  He ran to the Philippines where he felt safe enough to start at least two pornographic websites (hardly the actions of someone who thought the law was hot on his trail).  He is now back in the United States having been arrested in Manila several months ago.  With the help of Philippine law enforcement, the FBI nabbed Frye and is returning him to Alabama to face the charges against him. Read the rest of this entry »

According to the U.S. Securities and Exchange Commission, Lawrence “Lee” Loomis and his father-in-law John Hagener defrauded 100 investors out of $10 million by soliciting investments in supposed loans to homebuyers to be secured by real estate deeds of trust. According to the SEC, the defendants told prospective investors that the investments would be put into safe “liquid high-yield accounts” earning 12 percent and that the investments were guaranteed by a third party. Read the rest of this entry »