Securities

Recent Posts

A Fund Operator Defrauds the Public – and Tries to Fool the SEC
Posted on 8 Mar 2011 by Thomas O. Gorman

A key focus of SEC Enforcement in recent months has been investment fund fraud and Ponzi scheme cases. Once considered difficult to detect in the past the Commission brought few actions. Now, however, seldom a week goes by without at least one and... Read More

Manhattan U.S. Attorney Prevails in Securities Fraud, RICO Case
Posted on 24 Mar 2015 by Thomas O. Gorman

The SEC has brought a series of investment fund fraud and Ponzi schemes. Indeed, the Commission has brought so many of these cases in recent years they have become a staple. None of those cases, however, involved securities fraud tied to an investment... Read More

Utah Man Pleads Guilty To Running Two Separate Ponzi Schemes
Posted on 23 Apr 2013 by Jordan D. Maglich

A Utah man agreed to plead guilty for his involvement in two separate Ponzi schemes - while on parole for a previous conviction for a third Ponzi scheme - that took in more than $30 million from investors. Wayne Ogden, of Koosharem, Utah, was convicted... Read More

TD Bank Agrees to Pay $52.5M to Settle Charges Related to Rothstein Scheme
Posted on 24 Sep 2013 by Michael J. Lello

WASHINGTON, D.C. — (Mealey’s) TD Bank NA on Sept. 23 agreed to pay $52.5 million to settle federal regulators’ allegations that the bank helped attorney Scott Rothstein run a $1.2 billion Ponzi scheme out of his law firm. The Securities... Read More

This Week in Securities Litigation (April 1, 2011)
Posted on 1 Apr 2011 by Thomas O. Gorman

In the week ending with "April Fools Day," the Commission continued to issue proposed regulations to implement the Dodd-Frank Wall Street and Consumer Protection Act. SEC Enforcement focused on investment fund fraud actions, filing or resolving... Read More

After Two Days of Trial, Florida Man Agrees to Plead Guilty to $10 Million Ponzi Scheme
Posted on 14 Mar 2013 by Jordan D. Maglich

In an unlikely turn of events, a Florida man decided to change his plea from 'not guilty' to 'guilty' on the third day of his trial, effectively ending the trial. George Elia, 69, made his decision after hearing a morning of testimony... Read More

SEC Charges Medical Device Company and its Founder with Fraud
Posted on 27 Jun 2013 by Thomas O. Gorman

The Commission charged a medical device company and its founder with making false statements regarding the FDA’s refusal to approval a device which is a key component of its business plan. The action was brought against Imaging3, Inc. and its founder... Read More

Investment Professional Charged with Fraud, Self-Dealing by SEC
Posted on 14 May 2015 by Thomas O. Gorman

The SEC charged another investment professional with fraud and self-dealing. SEC v. Ahmed, Civil Action No. 3:15-cv-00675 (D. Conn. Filed May 5, 2015). Defendant Iftikar Ahmed is an investment professional who was a partner at Oak Investment Partners... Read More

Another Investment Fund Fraud Case
Posted on 10 Mar 2011 by Thomas O. Gorman

The SEC continues to focus on investment fund fraud cases, filing its second action this week that contains Ponzi scheme allegations. SEC v. Beckman , Case No. 11 CV 574 (D. Minn. March 7, 2011). The SEC's most recent investment fund fraud action... Read More

An Investment Fund Fraud Based on A Claimed Treatment for HIV/AIDS
Posted on 5 Mar 2013 by Thomas O. Gorman

For almost six years Michael Harris solicited investments in M.F. Harris Research, Inc. Eighty investors put up thousands of dollars for what they understood was a possible treatment for HIV/AIDS. The investment was a fraud. Yesterday a jury convicted... Read More

SEC Wins Summary Judgment Ruling in Ponzi Scheme Case
Posted on 13 Oct 2014 by Thomas O. Gorman

The Commission prevailed in an investment fund scheme action, obtaining a favorable summary judgment ruling. In reaching its conclusion the Court rejected claims that the action was time barred and that the cause of action was outside the scope of Exchange... Read More

Former Exorcist/Attorney/Bishop Sentenced to 11-Year Term for Role in $6 Million Ponzi Scheme
Posted on 21 Mar 2013 by Jordan D. Maglich

A former New York attorney who also claimed to be a trained exorcist and bishop was sentenced to 11 years for his role in a Ponzi scheme that duped investors out of over $6 million. James Lagona received the sentence from United States District Judge... Read More

Another Partially Settled Investment Fund Fraud Case
Posted on 17 Aug 2010 by Thomas O. Gorman

The Securities & Exchange Commission resolved another investment fund fraud action with two individual defendants. SEC v. Amante Corp. , Civil Action No. 09-CIV-61716 (S.D. Fla. Filed Oct. 29, 2009) ( discussed here ). The action is all too familiar... Read More

Measuring the Success Of SEC Enforcement
Posted on 20 Sep 2010 by Thomas O. Gorman

For over a year an a half, there has been on-going effort to rejuvenate SEC enforcement. Enforcement has new personnel, new organization and new initiatives. During this process the SEC's market crisis investigations have yielded some significant... Read More

Two Criminal Investment Fund Fraud Actions
Posted on 10 Feb 2015 by Thomas O. Gorman

Despite massive publicity and numerous cases by enforcement authorities, investment fund fraud actions continue to be a staple of the SEC, CFTC and the DOJ. In case after case investors are convinced to part with their hard earned cash, trusting those... Read More

  • Blog Post: This Week in Securities Litigation (June 25, 2010)

    The Supreme Court handed down two significant rulings as the week came to a close. In one, it rejected constitutional challenges to the honest services fraud statute which is frequently used in white collar prosecutions. In a second, the High Court rejected the Second Circuit's so-called "foreign...
  • Blog Post: Another Partially Settled Investment Fund Fraud Case

    The Securities & Exchange Commission resolved another investment fund fraud action with two individual defendants. SEC v. Amante Corp. , Civil Action No. 09-CIV-61716 (S.D. Fla. Filed Oct. 29, 2009) ( discussed here ). The action is all too familiar. The complaint names as defendants the fund...
  • Blog Post: Measuring the Success Of SEC Enforcement

    For over a year an a half, there has been on-going effort to rejuvenate SEC enforcement. Enforcement has new personnel, new organization and new initiatives. During this process the SEC's market crisis investigations have yielded some significant cases such as the action against Goldman Sachs...
  • Blog Post: This Investment Adviser Should Have Listened to Gordon Gekko

    In the initial Wall Street film, financier Gordon Gekko says the now-famous line "greed is good." In the recently released sequel, Wall Street, Money Never Sleeps , Mr. Gekko repeats the line, noting "now it seems it's legal." Later he amplifies citing the old investment saw...
  • Blog Post: An Usual Investment Fund Fraud Complaint

    The Commission filed an unusual investment fund fraud action in SEC v. Chiaese , Civil Action No. 10-cv-5110 (D.N.J. Filed Oct. 5, 2010). In what is now the new staple of SEC enforcement, the typical case alleges that the individual defendants and their related entities raised funds from a number...
  • Blog Post: A Fund Operator Defrauds the Public – and Tries to Fool the SEC

    A key focus of SEC Enforcement in recent months has been investment fund fraud and Ponzi scheme cases. Once considered difficult to detect in the past the Commission brought few actions. Now, however, seldom a week goes by without at least one and sometimes several investment fund fraud actions being...
  • Blog Post: Another Investment Fund Fraud Case

    The SEC continues to focus on investment fund fraud cases, filing its second action this week that contains Ponzi scheme allegations. SEC v. Beckman , Case No. 11 CV 574 (D. Minn. March 7, 2011). The SEC's most recent investment fund fraud action is against Jason Beckman and his controlled entity...
  • Blog Post: This Week in Securities Litigation (March 25, 2011)

    The Galleon insider trading trial continues this week in New York. In another New York court room the Commission struggled to have a partial settlement approved by the court. While the agency secured the necessary approval it was not without a cost: The court reserved the right to reconsider the...
  • Blog Post: This Week in Securities Litigation (April 1, 2011)

    In the week ending with "April Fools Day," the Commission continued to issue proposed regulations to implement the Dodd-Frank Wall Street and Consumer Protection Act. SEC Enforcement focused on investment fund fraud actions, filing or resolving seven cases. The Commission also brought a...
  • Blog Post: This Week in Securities Litigation (April 8, 2011)

    Prosecutors concluded their case-in-chief in the Galleon insider trading trial this week. SEC enforcement, in conjunction with the U.S. Attorney's Office in New Jersey, brought an insider trading case against an attorney, a former associate of three prominent law firms, and a professional trader...
  • Blog Post: This Week in Securities Litigation (April 15 , 2011)

    The market crisis, the FCPA and insider trading were again the key focus this week. On Capitol Hill the Senate Permanent Committee on Investigations issued a lengthy, detailed report regarding the causes of the market crisis. This report builds on earlier efforts but contains substantial new evidence...
  • Blog Post: This Week in Securities Litigation (May 13, 2011)

    The war on insider trading by the Manhattan U.S. Attorney was propelled forward this week with the conviction of Galleon hedge fund founder Raj Rajaratnam on all fourteen counts. At the same time another defendant in the expert network investigation pleaded guilty. DOJ also prevailed in an FCPA jury...
  • Blog Post: A Tale of Two Investment Fund Cases

    Earlier this month Commission officials testified on Capitol Hill regarding the failure of the agency to investigate the alleged Stanford Ponzi scheme at an earlier date. Lawmakers were assured that a series of steps have been taken to preclude a repetition of such conduct in the future. The focus...
  • Blog Post: SEC Prevails on Summary Judgment

    The Commission prevailed on a motion for summary judgment against the founder and chief investment officer of a registered investment company, Leila Jenkins. The complaint centered on allegations that about $1.2 billion of the $1.3 billion the fund claimed to have under management was fictitious. The...
  • Blog Post: Former FBI Agent and Wife Charged with Investment Fraud

    There is little new about another investment fund fraud or Ponzi scheme case except of course the victims. For whatever reason, these cases were rare prior to the time Bernard Madoff was arrested. Since the King of Ponzi schemes was trotted off to jail however the Commission has brought dozens -...
  • Blog Post: This Week In Securities Litigation (Week ending September 21, 2012)

    The New York Stock Exchange settled a proceeding this week which alleged that it provided trading information to select proprietary clients prior to releasing it to the public over the last four year. The Commission also filed insider trading actions centered on a corporate director and a registered...
  • Blog Post: This Week In Securities Litigation (Week ending October 5, 2012)

    The President's new market crisis task force brought its first action this week. It named as a defendant Bear Stearns which has been acquired by JP Morgan. The New York AG, co-chair of the task force announced in the state of the union address earlier this year, brought the action. It differs substantially...
  • Blog Post: This Week In Securities Litigation (Week ending October 19, 2012)

    Significant events this week included the proposal by the SEC of additional swaps rules regarding security-based swap dealers and major participants. Enforcement settled a "suspicious trading" insider trading action with a Hong Kong based entity while initiating a case against an investment...
  • Blog Post: An Investment Fund Fraud Based on A Claimed Treatment for HIV/AIDS

    For almost six years Michael Harris solicited investments in M.F. Harris Research, Inc. Eighty investors put up thousands of dollars for what they understood was a possible treatment for HIV/AIDS. The investment was a fraud. Yesterday a jury convicted Mr. Harris of securities, mail and wire fraud...
  • Blog Post: After Two Days of Trial, Florida Man Agrees to Plead Guilty to $10 Million Ponzi Scheme

    In an unlikely turn of events, a Florida man decided to change his plea from 'not guilty' to 'guilty' on the third day of his trial, effectively ending the trial. George Elia, 69, made his decision after hearing a morning of testimony from a number of his victims and several more ...
  • Blog Post: Former Exorcist/Attorney/Bishop Sentenced to 11-Year Term for Role in $6 Million Ponzi Scheme

    A former New York attorney who also claimed to be a trained exorcist and bishop was sentenced to 11 years for his role in a Ponzi scheme that duped investors out of over $6 million. James Lagona received the sentence from United States District Judge William M. Skretny, who dismissed Lagona's...
  • Blog Post: Brokerage Founder and Fund Manager Charged With Fraud by SEC

    A management company, its principal, a brokerage firm and its founder were charged with fraud in an administrative proceeding initiated by the Commission. In the Matter of John Thomas Capital Management Group LLC, Adm. Proc. File No. 3-15255 (March 22, 2013). Named as Respondents in the proceeding...
  • Blog Post: Utah Man Pleads Guilty To Running Two Separate Ponzi Schemes

    A Utah man agreed to plead guilty for his involvement in two separate Ponzi schemes - while on parole for a previous conviction for a third Ponzi scheme - that took in more than $30 million from investors. Wayne Ogden, of Koosharem, Utah, was convicted earlier this year for his role in one of the...
  • Blog Post: Ponzi Scheme Defendants Agree to Pay $55M in Investment Club Action

    WEST PALM BEACH, Fla. - (Mealey's) A federal judge in Florida on April 24 signed consent orders in which defendants agreed to pay nearly $55 million to end a suit in which the U.S. Commodity Futures Trading Commission (CFTC) alleged that they orchestrated a $28 million Ponzi scheme to defraud...
  • Blog Post: SEC Secures $2.7 Million Judgment Against Broker and Others

    The Commission prevailed on a motion for summary judgment against a brokerage firm, its principle and a former managing director, ultimately securing judgments of over $2.7 million. SEC v. Constantin, Civil Action No. 11-CV-4642 (S.D.N.Y. Filed July 6, 2011). This is one of what may be an increasing...