Blog Archives

SEC: Plan to Invest in Hamilton Tickets a Fraud

People are always searching for the next great thing; the next great innovation; the next great adventure; and the next great investment. Often it is the search for that safe, sure thing return; the one where the investment can’t be

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A Ponzi Scheme Where One Investor Directly Paid Another

In the typical Ponzi scheme unscrupulous individuals induce investors to part with their cash based on a series of misrepresentations about the proposed investment. The investor money is then in part misappropriated and in part used to repay other investors

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The SEC Files Another Action Based on ZeeksRewards

ZeeksRewards is the case that just keeps on giving. The multi-level pyramid and Ponzi scheme has generated two prior SEC enforcement actions. One involved the company, Rex Ventures Group, LLC, and its principal, Paul Burks. SEC v. Rex Venture Group,

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SEC Prevails in Trial of Ponzi Scheme Case

SEC Prevails in Trial of Ponzi Scheme Case While Ponzi scheme cases have become a staple of SEC Enforcement in recent years, most settle. Last week the SEC prevailed in one of the few that proceeded to trial. SEC v.

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SEC Files Offering Fraud and Ponzi Scheme Cases

A staple of SEC enforcement in recent years has been offering fraud and Ponzi scheme cases. This week the Commission filed two more of these actions, one an offering fraud targeting military personnel and a second and investment fund fraud

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SEC Brings Another ATM Based Ponzi Scheme Case

Ponzi and investment scheme cases are a staple of SEC enforcement in the post Madoff world. Emerging, however, may be a new trend based on a subset of these frauds – investments in ATM machines. At the close of last

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SEC Prevails Following Two Week Jury Trial

SEC prevailed in a two week jury trial based on diverting funds to a massive Ponzi scheme.

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This Week In Securities Litigation (The week ending January 10, 2014)

A review of SEC and securities enforcement litigation this week.

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This Week in Securities Litigation (Week ending October 18, 2013)

A review of securities enforcement litigation this week.

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SEC Brings Another Investment Fund Fraud Action

The SEC brought another investment fund fraud action, this time against a former associate of a registered investment adviser and a licensed realtor.

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The “No Knowledge” Defense In A Criminal Securities Fraud Case

The operator of a Ponzi sheme failed in his effort to avoid jail using the “no knowledge” defense of Exchange Act Section 32(a).

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Former Political Figure, Recidivist, Charged by SEC, USAO with Fraud

Craig Berkman, a former Oregon political figure and repeat securities law violation was charged by the U.S. Attorney’s Office in Manhattan and the SEC with operating an investment fund fraud. Investors were solicited with fraudulent claims about purchasing pre-IPO interests

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This Week In Securities Litigation (Week ending February 15, 2013)

SEC Chairman Elise Walter and CFTC Chairman Gary Gensler testified before a Senate Committee this week, focusing on the implementation of Dodd-Frank. The SEC also approved the budget for the PCAOB. Two former senior executive in the organization of jailed

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SEC Brings Three Actions Involving Five Former Stanford Employees

Robert Allen Stanford, the convicted architect of an $8 billion Ponzi scheme centered around Stanford International Bank or SIB, is serving a 110 year prison sentence. Now the Commission has brought three administrative proceedings naming as Respondents five of his

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This Week In Securities Litigation (July 27 to August 17, 2012)

This edition of This Week In Securities Litigation compiles actions which took place during the recent period when a series articles were published centered on two topics. One focused on director and officer liability while the other concerned SEC actions

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Peter Madoff Pleads Guilty, Named In SEC Suit

Peter Madoff, the younger brother of jailed Ponzi king Bernie Madoff, pleaded guilty to criminal charges on Friday. He was also named as a defendant in a fraud suit filed by the SEC. While Mr. Madoff admitted to a series

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This Week In Securities Litigation (Week ending June 15, 2012)

The jury heard final argument in the high profile insider trading case against former Goldman Sachs director Rajat Gupta this week. In a court room in the Southern District of Texas the high profile action against R. Allen Stanford concluded

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Fourteen Charged For Ignoring Red Flags Suggesting Fund Was A Fraud

The Commission brought an action naming fourteen individuals as defendants who sold interests in a massive Ponzi scheme. The complaint centers on claims that they ignored red flags indicating that the fund was a fraud. SEC v. Arias, CV 12-2937

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A TALE OF TWO LAYWERS

Lawyers are often viewed as the gatekeepers because of their position in corporate transactions. In two cases brought this week unfortunately the lawyers were more than gatekeepers, they were at the center of the wrongful conduct. One is SEC v.

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TAPES SEND SKY CAPITAL CEO, OFFICE MANAGER TO PRISON

Wire tap tapes proved the undoing of jailed hedge fund mogul Raja Rajaratnam who is serving eleven years for insider trading. Audio tapes from the FBI also helped convict and send to prison for former brokerage CEO Ross Mandell and

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THIS WEEK IN SECURITIES LITIGATION (Week ending March 2, 2012)

This week the jury began deliberations in the Robert Allen Stanford Ponzi scheme case without hearing from Mr. Stanford despite promises to the contrary from defense counsel at the beginning of the trial. Granger announced an SEC FCPA probe centered

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THIS WEEK IN SECURITIES LITIGATION (Week ending February 17, 2012)

Budgets were a key topic this week. The President proposed one which would increase the SEC’s funding. The agency also proposed a budget for FY 2013 which would increase the size of the Enforcement Division by adding 191 positions. In

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A SPLIT DECISION FOR THE SEC ON ITS SIPIC APPLICATION

The SEC partially prevailed in a proceeding brought against the Securities Investor Protection Corporation or SIPC. The Court agreed with the Commission that the appropriate manner in which to seek an order compelling SIPIC to file an application for a

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THIS WEEK IN SECURITIES LITIGATION (Week ending February 10, 2012)

Government authorities announced a $26 billion settlement with five of the largest banks arising out of the market crisis and its impact on home owners. In announcing the deal, the Attorney General noted that the resolution would not impact other

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THIS WEEK IN SECURITIES LITIGATION (Week ending February 3, 2012)

Former Farris Baker Watts General Counsel Ted Urban finally prevailed in his long running battle with the SEC to clear his name and reputation. The Commission, on an evenly divided vote, affirmed the initial decision of the Administrative Law Judge,

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THIS WEEK IN SECURITIES LITIGATION (July 22, 2011)

Congress reviewed the implementation of Dodd-Frank, hearing testimony from the SEC Chairman and others. The Commission, along with other agencies and the Fed also submitted a report on risk management to Senate and House Committees pursuant to Dodd-Frank. In what

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THIS WEEK IN SECURITIES LITIGATION (July 15, 2011)

This week the SEC lost its bid to dismiss an action brought by former Goldman Sachs director Rajat Gupta arising out of its insider trading case brought as an administrative proceeding against him. The GAO issued reports on the revolving

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BECOMING THE INVESTORS’ ADVOCATE

Discussions about whether DOJ and the SEC have effectively investigated the origins and causes of the market crisis and brought the appropriate criminal and civil enforcement actions usually focus on what Main Street views as “Wall Street Titans.” Moguls who

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