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SEC Securities Fraud Enforcement Update: September 2015

Posted: Oct 20, 2015 | Posted in:

September 2015 has been a busy year for the Securities and Exchange Commission (SEC). The SEC regularly publishes information about its enforcement activities on its website, and through the first two weeks of September we have already seen almost as many notices as we saw in all of August. Here, we have compiled some of the SEC’s most noteworthy allegations for individual investors.

Hedge Fund Advisor Collects $900,000 in Unearned Management Fees

On September 4, the SEC announced charges against the CEO of an investment advisory firm who it asserts collected almost $900,000 in unearned management fees over a two-year period. The SEC’s charges include allegations that the CEO misrepresented the value of his firm’s investments at $2 million – when in reality the value was closer to $200,000. The SEC is also charging the firm’s outside auditors, claiming that a deficient audit enabled the firm to send misleading financial statements to its investors.

Former Licensed Securities Professional Offers “Indestructible Wealth” with False Guarantees

On September 9, the SEC announced charges against a former licensed security professional and two accomplices who received more than $14 million from over 100 investors with promises of “Indestructible Wealth” and guaranteed returns. The trio allegedly convinced retirees to sell their existing investment assets, and then used the proceeds to pay for travel, entertainment and other items totaling more than $40,000 per month. The former licensed securities professional also allegedly touted his “22 years of experience as a financial advisor,” while failing disclose his extensive disciplinary record.

Securities Firm Inflates Portfolio and Misrepresents Returns on Paid Radio Program

Also on September 9, the SEC announced charges against the CEO of a small financial services firm for allegedly exaggerating her credentials on a regular paid radio program. According to the SEC, the CEO claimed to have as much as $2 billion in investor funds under management, when in reality she managed no more than 20 percent of this amount. She also allegedly misrepresented that her firm was in the “top 1 percent” worldwide in terms of investment returns. An SEC spokesperson stated that the case is just one recent example of “so-called financial experts on the radio” who are “often merely advertisers who may not be [advertising] truthfully.”

Perpetrators of Real Estate Fraud Scam Retained 97 Percent of Investors’ Funds

On September 11, the SEC announced charges against five individuals with defrauding investors out of roughly $18 million. The individuals allegedly raised the money from 225 investors who were told that their funds would be invested in beachfront property, recycling centers, and foreclosed properties. However, according to the SEC, the perpetrators of the fraud used fairly sophisticated schemes to convince individuals to invest, lied to investors about where their money was going, and made “Ponzi-like payments” when some investors asked for their money back.

Contact a Securities Fraud Lawyer in New York City Today

These and other recent cases shed light on the types of scams and frauds that cost investors across the country their hard-earned assets on a daily basis. At Zamansky LLC, we represent individuals who have suffered stock market and other investment losses as a result of all different types of fraud. If you would like to speak with one of our attorneys, contact us now to schedule a free consultation.