You Won’t Find a Rat By Looking For Cats

Only when you realize how powerfully that theory skews how you perceive the evidence can you throw it off and search instead for the thing that you are trying to avoid, a fraud.

Last week the SEC filed an emergency enforcement action to halt what it claims was an ongoing Ponzi scheme that promised investors attractive returns on investment in water-filtering natural stone pavers imported from Australia. Specifically, the SEC charged Eric Aronson, Vincent Buonauro, Jr., Robert Kondratick, Fredric Aaron, and the PermaPave Companies (PermaPave Industries, LLC, PermaPave USA Corp., PermaPave Distributions, Inc., Permeable Solutions, Inc., Verigreen, LLC) with bilking roughly 140 investors out of more than $26 million beginning in 2006. According to the SEC’s press release:   (more…)