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

The U.S. Securities and Exchange Commission (“SEC”) has charged Jeremy J. Blackburn (“Blackburn”) and his company, Canopy Financial, Inc. (“Canopy”), with defrauding investors in a $75 million private placement offering.  Canopy sells administration and management services in connection with employer-sponsored health plans and flexible spending accounts.  According to the SEC, the central misrepresentations involved Canopy’s financial condition.  Specifically, the SEC claims that the defendants misrepresented that Canopy had a much healthier cash balance and a more substantial client base than it actually had.  The SEC also claims that Blackburn misappropriated $1.7 million to his personal bank accounts.  Accounting firm KPMG reported the fraud when it learned that Canopy was falsely claiming that KPMG had audited its financial statements.Notice that Canopy actually had a functioning business.  It was not a pure fraud, not an illusion created out of whole-clothe.  But, if the SEC’s allegations prove true, it nevertheless perpetrated a fraud that will scramble the nest eggs of hundreds of retirees.  For those who will enter retirement without the financial resources they expected to have, the result is the same as with a pure fraud.

The only smart way to protect your nest egg is to have any unregistered investment investigated by a professional investor protection company.  Such a company has seen hundreds of frauds, pure and otherwise.  Only someone with experience can recognize the subtle hints that give away a fraud.