The Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy on Wednesday issued an Investor Alert to help educate investors about affinity fraud, a type of investment scam that the agency is seeing more of that preys upon members of identifiable groups, such as religious or ethnic communities or the elderly.As the SEC explains, affinity fraud almost always involves either a fake investment or an investment where the fraudster lies about important details (such as the risk of loss, the track record of the investment, or the background of the promoter of the scheme). “Many affinity frauds are Ponzi or pyramid schemes, where money given to the promoter by new investors is paid to earlier investors to create the illusion that the so-called investment is successful,” the SEC says.
Read Advisor One report [...]
Andrea Stoelker, the girlfriend of R. Allen Stanford and a former Stanford Financial Group executive, has been ordered to pay more than $600,000, court records show. Documents show U.S. District Judge David Godbey issued the final judgment against Stoelker on Sept. 24, ruling on a complaint filed in 2010 in the U.S. District Court’s Northern District of Texas Dallas Division by Ralph Janvey, the court-appointed receiver for the Stanford International Bank Ltd. More in the Houston Business Journal [...]
As experts debated Tuesday the current regulatory framework for advisors and whether brokers should be held to the same fiduciary standard as advisors, Marcus Stanley, policy director for Americans for Financial Reform, argued that fiduciary advice for retail clients is particularly “pressing.” He cited the rise of complex structured products and the fact that the top complaint in Financial Industry Regulatory Authority (FINRA) arbitration cases is breach of fiduciary duty. Michelle Ong, spokeswoman for FINRA, confirmed to AdvisorOne on the day of Stanley’s assertion that fiduciary duty is indeed the biggest complaint in arbitration cases. Read Advisor One report [...]
(Reuters) – The Financial Industry Regulatory Authority will more deeply scrutinize the potential costs and benefits of securities industry rules it wants to propose, a top lawyer for the Wall Street industry-funded watchdog said on Tuesday.
FINRA will take the added measures before submitting proposed rules to the U.S. Securities and Exchange Commission for approval, said Robert Colby, FINRA’s chief legal officer.
The move comes, in part, because the SEC wants FINRA to “better support” the economic aspects of proposals the SEC must review, Colby said in remarks to compliance professionals at an industry luncheon in New York. The SEC must review and approve rules proposed by securities industry self-regulatory organizations.
More on Reuters [...]
A former Intel Corp. executive, whose trial testimony helped convict hedge fund titan Raj Rajaratnam, avoided prison time on Monday for his role in the biggest insider-trading prosecution of a generation. Rajiv Goel is the third former friend and business associate, who testified against Mr. Rajaratnam at his 2011 Manhattan federal court trial, to be handed a sentence of probation. Mr. Goel is among scores of fund managers, traders, lawyers, executives and consultants caught in a U.S. government crackdown on Wall Street insider trading in the past four years. Read The Globe and Mail report [...]
Bernie Madoff gets a bad rap. Sure, he may be in prison for the rest of his life for stealing billions in a notorious Ponzi scheme. But that doesn’t mean regulators have shut down his money management firm, Bernard L. Madoff Investment Securities LLC.
According to a check this afternoon of the SEC’s online Investment Adviser Public Disclosure program, his investment advisory firm’s SEC registration remains approved—as it has been since September 12, 2006. There are limited disciplinary problems disclosed on the firm’s SEC’s IAPD report related to its affiliated, now inactive, broker-dealer but no money management misdeeds. More in Forbes [...]
A small-town Iowa boy, raised in hard times by a widowed mother, starts a business in the back room of a barber shop before setting out to the big city. He strikes it rich and returns years later to local glory, spending lavishly and savoring his role as the big man in a little town. It’s a real story, but as became clear this summer, a dark thread ran through it. For most of the two-decade life of Peregrine Financial Group, a leading independent futures brokerage, founder and chief executive Russell Wasendorf Sr. was taking hundreds of millions of dollars of his customers’ money to cover losses and live large. Read the Financial Times report [...]
A City stockbroker was warned today that he faced a lengthy prison sentence after admitting a £32 million Ponzi fraud. Nicholas Levene, 48, former deputy chairman of Leyton Orient FC, cheated investors by promising them high returns. Levene, nicknamed “Beano” because of his love of the comic, then kept customers happy by using other investors’ money to show that they were earning healthy yields. Among his victims were brother and sister Brian Souter and Ann Gloag, the co-founders of Stagecoach Group, who lost £10 million. More in the London Evening Standard [...]
A once-prominent Grass Valley real estate broker and three of his associates are facing felony charges for their alleged roles in an expansive Ponzi scheme that cost investors, some of them elderly, millions of dollars. Philip Lester, the former head of the Gold Country Lenders real estate firm who has since lost his lending license, and his sister and chief financial officer, Susan Laferte, each face 66 charges of securities fraud, elder abuse and conspiracy, according to the state attorney general’s office. Also implicated in the alleged scheme were Lester’s wife, Ellen Lester, who is an attorney and business partner, and their business associate Jonathan Blinder. Ellen Lester faces two felony counts of conspiracy and securities fraud; Blinder, four felony counts of securities fraud. Read Sacramento Bee report [...]
A South Florida jeweler frequented by Ponzi schemer Scott Rothstein has agreed to settle a lawsuit trying to recoup money that Rothstein paid for its fine earrings, watches and other jewelry. SPD Group, operating as J.R. Dunn Jewelers, agreed to a $325,000 settlement with the trustee handling the bankruptcy case for Rothstein’s shuttered law firm, court documents show. The settlement money, to be paid over 25 months, will help reimburse creditors of the former Rothstein Rosenfeldt Adler law firm. The settlement still needs approval from the U.S. Bankruptcy Court in Fort Lauderdale. More in the Sun Sentinel [...]