LexisNexis® Legal Newsroom
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...

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...

SEC Charges City and its Underwriter With Fraud

The City of Victorville California, Assistant City Manager Keith Metzler, deal underwriter and broker Newcomb & Dedios or KND and its principle Jeffrey Kinsell were named as defendants by the Commission in a suit alleging fraud in connection with the sale of municipal bonds. The city airport...

Two Investment Frauds Centered on Pre-IPO Shares of Facebook

Fraudulent investment funds purporting to give the public an opportunity to acquire pre-IPO shares of potentially hot stocks such as Facebook have been front and center in the District Court in Manhattan in recent days. In one case a former Oregon gubernatorial candidate and securities law recidivist...

SEC Charges Medical Device Company and its Founder with Fraud

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 Dean Norman Janes. SEC v. Imaging3, Inc., Case...

SEC Alleges Texas Man Ran $4.5 Million Bitcoin Ponzi Scheme

The Securities and Exchange Commission has filed civil fraud charges against a Texas man, accusing him of masterminding a Ponzi scheme using the virtual currency known as Bitcoin that promised annual returns exceeding 300%. Trendon T. Shavers, 30, was charged with violations of federal securities laws...

UBS to Pay $120M to Settle Claims Over Lehman Brothers Securities Losses

NEW YORK — (Mealey’s) In a New York federal court, UBS Financial Services Inc. agreed on August 8 to pay $120 million to settle federal securities law claims that it misrepresented the investment quality of certain Lehman Brothers securities it sold before Lehman Brothers filed for bankruptcy...

SEC Brings Another Investment Fund Fraud Action

Investment fund frauds continue to be a staple of SEC enforcement. This week the Commission filed another of these actions. The defendants are a former representative of a registered investment adviser and a licensed realtor. SEC v. Dearman, Civil Action No. CV-553 (N.D. Okla. Filed August 27, 2013)...

SEC: Claimed Investment Adviser Defrauded Brokers, Investors

The Commission has brought a number of suits against investment advisers, money managers and their affiliates in recent weeks. See, e.g.,SEC v. Falcone, Civil Action No. 5027 (S.D.N.Y.)(recently settled action against Philip Falcone); SEC v. Dearman, Civil Action No. CV-553 (N.D. Okla. Filed Aug. 27...

Management Company Partner Convicted on Multiple Fraud Counts

A partner in an investment management company was convicted following a jury trial on multiple counts of mail and wire fraud as well as securities fraud. The charges stem from a scheme in which most of the $5 million in investor funds raised were siphoned off by the defendant and others for their personal...

TD Bank Agrees to Pay $52.5M to Settle Charges Related to Rothstein Scheme

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 and Exchange Commission announced in a press...

NHL Players Defrauded in Series of Investment Schemes

National Hockey League Players were the primary victims of a series of fraudulent investment schemes orchestrated by financial adviser Phillip Kenner and former professional race car driver Tommy Hormovitis. Collectively, the players others lost about $15 million. The court papers charge conspiracy,...

Principals of Investment Adviser Charged in SEC Action

Two principals of an investment adviser were named as Respondents in an SEC administrative proceeding. The action centers on claims that the two men improperly advised their clients to invest in off-shore funds without fully disclosing their affiliation with those funds or the fees they were paid. In...

SEC Files Two Investment Fraud Actions

The SEC brought two investment fraud actions. One centered on defendant Thomas J. Lawler, known as the Reverend Tom, and the sale of administrative remedies or ARs which eliminated the purchaser’s debt while yielding significant profits. SEC v. Lawler, 1:14-cv-02468 (N.D. Ga. Filed July 31, 2014...

SEC Wins Summary Judgment Ruling in Ponzi Scheme Case

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 Act Section 10(b). SEC v. Funinaga, Civil Action...

Investment Adviser Pleads Guilty to Wire Fraud Charge

Investment adviser Ismail Elmas pleaded guilty this week to an information charging one count of wire fraud. U.S. v. Elmas, No. 1:14-cr-00358 (E.D. Va.). This action is the latest is a series cases centered on investment frauds in which the adviser or promoter solicits funds from unsuspecting investors...

Two Criminal Investment Fund Fraud Actions

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 who claim to have a safe path to large profits. That...

SEC, NY AG Halt Fraudulent Investment Scheme

The SEC teamed last week with the New York AG to halt an on-going investment fund fraud run by a Pakistani citizen residing in New York. The SEC obtained a freeze order. The NY AG filed criminal charges and arrested the claimed fraudster. SEC v. Malik, Civil Action No. 15-1025 (S.D.N.Y. Filed February...

The Business Court Rules Again on Claims Under the North Carolina Securities Act

Last week's decision in Atkinson v. Lackey , 2015 NCBC 13 doesn't tell you everything you wanted to know about the North Carolina Securities Act (the "NCSA"), but it comes pretty close [ an enhanced version of this opinion is available to lexis.com subscribers ]. The lawsuit was...

Manhattan U.S. Attorney Prevails in Securities Fraud, RICO Case

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 scheme, a racketeering charge centered on an automobile...

Star Investment Manager, Advisers Charged With Fraud by SEC

The SEC issued an Order which charged investment manager Lynn Tilton, known as the Diva of Distressed Debt according to news reports, and her entities with fraud. Specifically, the Order Instituting Proceedings issued by the SEC, claims that Ms. Tilton overvalued certain funds in a manner which was contrary...

SEC Halts Fraudulent Farm Loan Investment Program

The Commission initiated an action centered on the misuse of offering proceeds tied to farm loans. The defendants include an investment adviser, a financial planner and an attorney. SEC v. Veros Partners, Inc., Civil Action No. 14-cv-659 (S.D. Ind. Filed April 22, 2015). The Court entered a temporary...

Father-Daughter Conclude Settlement With SEC

The SEC concluded its litigation with a father – daughter combination that solicited investors to purchase promissory notes based on representations that there would be risk free returns from forex trading. There were no returns, however, and most of the funds went to the father daughter tandem...

Investment Professional Charged with Fraud, Self-Dealing by SEC

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, a multistage venture capital firm. It advises several...

Investment Advisor Admits Theft to Settle SEC Fraud Charges

The Commission filed another action in which admissions were required as part of the settlement. The action centers on an investment adviser who misappropriated just under $2 million from his clients. As part of the settlement he admitted the theft. SEC v. Donnelly, Civil Action No. 15 6873 (E.D. Pa...