Blog Posts Tagged With Ponzi Schemes, Offering Frauds, and Other Scams

Subscribe to Ponzi Schemes, Offering Frauds, and Other Scams RSS Feed

SEC v. Gina Champion-Cain and ANI Development, LLC (S.D. Cal. Aug. 29, 2019, Contested)

Action against Defendants, a specialty lender and its principal, in connection with alleged fraud. According to the SEC, Defendants raised money from investors by claiming to offer investors an opportunity to make short-term, high-interest loans, and then misappropriated investor funds.

SEC Complaint

SEC Litigation Release
Continue Reading

SEC v. William Hutchinson a/k/a William Cluxton (M.D. Fla. Aug. 29, 2019, Contested)

Action against Defendant, an individual, for the alleged fraudulent sale of securities. According to the SEC, Defendant misrepresented the nature and scale of his company’s business, inflated sales and income figures, and falsely claimed that his company had been audited by a multinational accounting firm.  The SEC further alleges that Defendant used a significant portion of investor funds to pay for personal expenses.

SEC Complaint  

SEC Litigation Release
Continue Reading

SEC v. Bitqyck, Inc., et al. (N.D. Tex. Aug. 29, 3019, Settled)

Action against a company and its two founders in connection with alleged fraud against investors in securities offerings of digital assets and operation of an unregistered digital asset exchange. According to the SEC, Defendants misrepresented a daily deals platform as a global online marketplace and falsely claimed that digital tokens provided fractional shares of stock.  The SEC further alleges that Defendants falsely told investors that the tokens provided an interest in a cryptocurrency mining facility
Continue Reading

SEC v. Live Well Financial, et al. (S.D.N.Y. Aug. 29, 2019, Partially Settled and Partially Contested)

Action against Defendants, a reverse-mortgage company and its CEO, CFO, and Executive Vice President, for their alleged roles in a bond mismarking scheme. According to the SEC, Defendant company fraudulently inflated the value of its portfolio of reverse-mortgage bonds by submitting inflated bond prices to a pricing service.  The SEC alleges that, as a result, Defendant company borrowed more from lenders than it would have been able to had the bonds been priced accurately, and
Continue Reading

SEC v. Hartman Wright Group, LLC and Tytus W. Harkins (D. Colo. Aug. 26, 2019, Contested)

Action against Defendants, a real estate company and its founder, for alleged unregistered real estate offering fraud. According to the SEC, Defendants solicited investors through paid finders, mailing lists, seminars, and the company’s website, and told investors that Defendant company purchased mobile home parks, made capital improvements, and then sold them for a profit.  The SEC also alleges that Defendants promised investors a specified rate of return and, in some cases, equity ownership.  The SEC
Continue Reading

SEC v. Terry Wayne Kelly and Kelly Management, LLC (S.D. Miss. Aug. 20, 2019, Settled)

Action against Defendants, a Mississippi company and its principal, for their alleged role in selling promissory notes in connection with a Ponzi scheme.  According to the SEC, Defendants provided false information to investors by telling them that their money would be used to harvest timber and promising annual returns of 12 to 15 percent.  The SEC alleges, however, that Defendants never obtained any harvesting rights, forged deeds and cutting agreements, and misappropriated investor funds.  A
Continue Reading

SEC v. Crystal World Holdings, Inc., et al. (D.D.C. Aug. 19, 2019, Contested)

Action against Defendants, an individual and his two alter ego entities, for allegedly soliciting money from investors by describing stock in the first entity as gifts offered in exchange for donations to the second entity, a nonprofit founded and controlled by Defendant individual. The SEC alleges that Defendants further misled investors and prospective investors by promising that stock in the first entity would soon be registered with the SEC without taking steps to register the
Continue Reading

SEC v. Alan G. Heide (S.D. Fla. Aug. 15, 2019, Contested)

Action against Defendant, the former CFO of a cash-advance company, for alleged offering fraud. According to the SEC, Defendant signed investors’ monthly account statements with knowledge that they contained misrepresentations, including overstatements of the accounts’ values and claims that the company had engaged an independent auditor.  The SEC further alleges that Defendant knew that the company’s founder had misappropriated investor funds.  Defendant has been charged in a parallel criminal proceeding.

SEC Complaint

SEC Press Release
Continue Reading

SEC v. Antonio M. Bravata (E.D. Mich. Aug. 13, 2019, Settled)

Action against Defendant for alleged offering fraud.  According to the SEC, Defendant offered securities in a company he controlled while concealing his role in the company, his criminal record, and the company’s management, among other misrepresentations.  Defendant has agreed to pay a civil penalty of $75,000 and to a trading bar.

SEC Complaint

SEC Litigation Release
Continue Reading

SEC v. Reginald “Reggie” Middleton, et al. (E.D.N.Y. Aug. 12, 2019, Contested)

Action against Defendants, a finance blogger and his two companies, for alleged offering fraud. According to the SEC, Defendants offered cryptocurrency tokens based on misrepresentations regarding their prior business track record and market demand for the tokens, among other things. The SEC further alleges that Defendant blogger misappropriated investor funds and manipulated the price of the tokens through his trading on an unregistered digital-asset platform.

SEC Complaint

SEC Press Release
Continue Reading

SEC v. Jerry Lee Farish and New Summit Homes, Inc. (N.D. Tex. Aug. 8, 2019, Contested)

Action against Defendants, an airline pilot and his real-estate development company, for alleged fraud. According to the SEC, Defendant induced his colleagues to invest in the construction of a luxury home, purporting to sell the same “second lien” to multiple investors, and then spent the investors’ funds on personal expenses. Defendant pilot has been charged in a parallel criminal proceeding.

SEC Complaint

SEC Litigation Release
Continue Reading

SEC v. Tanmaya Cabra and LaunchByte.io, LLC a/k/a The Kabra Group, LLC (D. Mass. Aug. 5, 2019, Contested)

Action against Defendants, an individual and his alleged shell company, for an alleged Ponzi scheme. According to the SEC, Defendants solicited investor funds for the purported purpose of investing in startups, and then used the funds for personal expenses and to make Ponzi-like payments to earlier investors. Defendant has been charged in a parallel criminal proceeding.

SEC Complaint

SEC Litigation Release
Continue Reading

In re Benjamin Cox (A.P. July 31, 2019, Settled)

Action against Respondent, a commodities trader, for alleged spoofing.  According to the CFTC, Respondent placed orders for futures contracts with the intent to cancel them before execution in order to manipulate prices.  Respondent has agreed to pay a civil penalty of $150,000 and a three-month trading suspension.

CFTC Order

CFTC Press Release
Continue Reading

SEC v. Bettor Investments, LLC and Matthew C. Stuart (D. Nev. July 29, 2019, Contested)

Action against Defendants, a sports-betting company and its principal, for an alleged unregistered offering and alleged offering fraud.  According to the SEC, Defendants publicly sold interests in a sports-betting venture without SEC registration.  The SEC further alleges that Defendants misled investors about the venture’s finances and other matters in connection with the conversion of certain investor interests into promissory notes.

SEC Litigation Release
Continue Reading

SEC v. Chua Seong Seng, a/k/a Robbie Chua (A.P. July 26, 2019, Settled)

Action against Respondent, a former executive of an alleged shell company, for alleged fraud.  According to the SEC, Respondent signed an SEC disclosure stating that his company had received $1,000,000 in a private-placement sale of its stock, when it had not.  Respondent has agreed to pay a civil penalty of $15,000 and to an officer-and-director bar.

SEC Order
Continue Reading

In re Corey D. Flaum (A.P. July 25, 2019, Settled); In re John Edmonds (A.P. July 25, 2019, Settled)

Action against Respondents, former precious-metals traders, for alleged spoofing.  According to the CFTC, Respondents placed orders for futures contracts with the intent to cancel them before execution in order to manipulate prices.  The CFTC has reserved decision on monetary sanctions pending Respondents’ fulfillment of their cooperation agreements with the CFTC.  Respondents have pleaded guilty in parallel criminal proceedings.

CFTC Order (Flaum)

CFTC Order (Edmonds)

CFTC Press Release
Continue Reading

In re Swapnil Rege (A.P. July 18, 2019, Settled)

Parallel enforcement actions against Respondent, a former employee of an investment advisor, for alleged fraud.  According to the SEC and CFTC, Defendant mispriced interest-rate swaps and swap options to inflate the returns of funds that the advisor managed, which in turn inflated the advisor’s fees.  Respondent has agreed to pay disgorgement of $600,000, prejudgment interest of $49,170.84; and a civil penalty of $100,000 to resolve the SEC action; to pay a $100,000 civil penalty to
Continue Reading

SEC v. AR Capital, LLC, et al. (S.D.N.Y. July 17, Settled)

Action against Defendants, an asset manager, its founder, and its former CFO, for alleged fraud.  According to the SEC, Defendants arranged for mergers among three real-estate investment trusts (“REITs”).  The SEC alleges that Defendants inflated their incentive fees and fraudulently charged the REITs duplicative, inflated, or fabricated expenses.  Defendants have agreed to jointly and severally pay disgorgement in the amount of $39 million.  Defendant asset manager, founder, and former CFO have agreed to pay civil
Continue Reading

SEC v. William J. Milles, Jr. and Donald J. Lutzko (W.D. Text. July 17, 2019, Contested)

Action against Defendants, founders of an oil and gas company, for an alleged Ponzi scheme.  According to the SEC, Defendants fraudulently solicited investments in their company by overstating its projects’ oil and gas production.  The SEC also alleges that Defendants made Ponzi-like payments to earlier investors and misappropriated investor funds to pay personal expenses.

SEC Complaint

SEC Litigation Release
Continue Reading

SEC v. Garrett M. O’Rourke and Michael J. Black (E.D.N.Y. July 17, 2019, Contested)

Action against Defendants, two microcap investors, for an alleged pump-and-dump scheme.  According to the SEC, Defendants cold-called retail investors to tout several microcap stocks that they held and, after the resulting price increase, sold their holdings.  The SEC also alleges that Defendants made misrepresentations in touting the stocks and attempted to hide their control of one of the microcap companies.  One Defendant has been charged in a parallel criminal proceeding.

SEC Complaint

SEC Litigation Release
Continue Reading

SEC v. Conn’s Inc. and Michael J. Poppe (S.D. Tex. July 15, 2019, Settled)

Action against specialty retailer and its former chief operating officer (“COO”) for improper accounting practices.  According to the SEC, Defendants understated the company’s allowance for bad debts and overstated its income.  Defendant company has agreed to pay a $1.1 million civil penalty.  Defendant COO has agreed to pay a $50,000 civil penalty.

SEC Complaint

SEC Litigation Release
Continue Reading

SEC v. Henry J. Wieniewitz, III and Wieniewitz Financial, LLC (S.D. Fla. July 15, 2019, Settled)

Action against a company that sold investment products and its owner for allegedly selling securities without registering as a broker-dealer.  According to the SEC, Defendants sold securities in two companies which were previously charged by the SEC with offering fraud schemes—one in December 2017 and one in August 2018—without being registered as a broker-dealer with the SEC or FINRA.  Defendants have agreed to pay penalties, disgorgement, and interest in amounts to be determined by
Continue Reading

SEC v. William Scott Lawler and Natalie Bannister (E.D.N.Y. July 12, 2019, Contested)

Action against Defendants, an attorney and an agent of microcap companies, for fraud and registration failures. According to the SEC, Defendants transferred control of public shell companies to a client of Defendant attorney, misrepresented restricted shares of those companies as freely trading, placed false bids for the shares to inflate their value, and sold the shares without registering them.

SEC Complaint

SEC Litigation Release

SEC Press Release
Continue Reading

LexBlog