Scott Rothstein was sentenced to 50 years in prison for his role in the operation of a $1.2 billion Ponzi scheme. Rothstein pled guilty in January to running the Ponzi scheme in which he sold stakes in legal settlements, in which people sell large settlements in legal cases for lump sums of cash at a discounted …
Securities America Requests Broker-Dealers Be Subpoenaed in Legal Battle Involving Medical Capital Private Placements
In a move Massachusetts securities regulators are calling an attempt to delay proceedings based on a “dangerous false presumption,” Securities America is asking the Court to subpoena other broker-dealers that sold Medical Capital notes, according to Investment News. Last January, Massachusetts regulators sued Securities America for allegedly misleading investors regarding Medical Capital private placements. While Securities …
Northern Colorado Ponzi Scheme Involves $3.5 Million
Jeremy Hart and Richard Novaria were arrested on Friday, May 28, 2010, for their alleged connection to a Northern Colorado Ponzi scheme that involved $3.5 million. The pair has been accused of duping nearly 25 investors in association with the illegal scam. According to Colorado Securities Commissioner Fred Joseph, 36-year-old Mr. Hart recruited a majority of the …
“Pump and Dump” Investment Scams Tied to BP Oil Spill
Federal officials are warning investors to be wary of pump-and-dump schemes in the aftermath of the BP oil spill, according to The Sacramento Bee. These scams are relatively common after a natural or environmental disaster, and several popped up in the aftermath of Hurricane Katrina. In a pump-and-dump scheme, a company goes to great lengths to …
Investor Claims Involving “100 Percent Principal Protected Notes” Soar
In the last few years, individual investors have lost billions of dollars collectively due to the marketing of complex, supposedly safe, securities by brokerage firms and securities advisors. Now, investors are bringing new cases against firms and advisors involving another complex security marketed as secure: “100 percent principal protected absolute return barrier notes.” According to …
NY Investment Adviser Ken Starr Charged With Fraud
News recently broke that the government has charged Kenneth Ira Starr, the New York investment adviser used by many of the stars, with fraud. This alleged investment fraud equates to about $30 million. The federal complaint makes the allegation that Mr. Starr used his clients’ money to purchase luxury items for himself, which supposedly included …
Life Settlement Securities Scam
Life settlements have received a lot of negative attention due to the industry’s high fees and aggressive sales tactics. Now there is another set of potential problems associated with life settlements.A life settlement is a financial transaction in which an older adult sells his or her life insurance policy to an investor at a discount …
Alternative Energy Scams
Investing in ‘green’ investments may seem like a no-brainer, but the reality is that there are risks associated with these types of investments. From false statements and unregistered stock to scams, it’s important to understand what kinds of dangers could be lurking before taking on such an investment. This post covers the risks of investing …
Joanne Schneider Withdraws Plea on Ohio Securities Fraud Charges
In 2009, Joanne Schneider pled guilty to thirteen counts of fraud and securities violations involving a $60 million investment scam, according to the Associated Press. The scam involved a failed real estate development in the Cleveland suburb of Parma Heights. Prosecutors claimed the scam was a typical Ponzi scheme, in which payoffs came from money put …
Spongetech Executives Charged With Alleged Securities Fraud
The top executives at Spongetech Delivery Systems Inc., a small company that frequently advertised at various sport venues, including the Yankee Stadium, have been arrested and charged in an alleged investment fraud scheme. According to U.S. Attorney Loretta Lynch, “the defendants in this case – Spongetech’s highest corporate officers – are charged with executing a bold scheme …
Senate Passes Financial Reform Bill
Last Thursday night, the U.S. Senate passed The Restore American Financial Stability Act, which seeks to implement financial reforms, curb abusive lending practices, and limit risk-taking by large institutions.Under the current version of the Act, the SEC will be called upon to decide the fate of mandatory securities arbitration. As it now stands, investors must …
SEC Files Ohio Lawsuit Naming Former Brokers of World Group Securities
The SEC filed a federal court lawsuit in northern Ohio last week against two former brokers of World Group Securities (WGS), the Georgia-based broker-dealer affiliate of the financial services firm, World Financial Group. The SEC’s Complaint alleges that former WGS brokers David L. Olson and Edward A. Allen raised nearly $15 million from at least …