Securities Industry Commentator by Bill Singer Esq

SEC Awards Over $28 Million to Whistleblower (SEC Release)

The Investment Banker, His Friend, the Friend's Holding Company, and the Two Deals (BrokeAndBroker.com Blog)

Two Virginia Men Convicted for Their Roles in Investment Fraud Scheme (DOJ Release)

Chairman Of Wealth Management Business Charged With Securities Fraud (DOJ Release)

SEC Charges Investment Adviser with Fraudulent Securities Offering (SEC Release)

Belgian and Lebanese National Charged in Superseding Indictment with Wire Fraud and Money Laundering / Defendant holds an Illinois attorney's license (DOJ Release)

Ponzi Scheme Operator Pleads Guilty to Securities Fraud (DOJ Release)

(1) Claimant reported significant information to the Commission which caused the company to initiate an internal investigation and factored into the staff's decision to open an investigation into the company's Redacted ; (2) the information reported by Claimant saved Commission time and resources; (3) Claimant provided assistance to staff in the form of an interview, testimony and identification of a key witness; and (4) there are important law enforcement interests here, as Claimant's information supported certain Redacted charges against a publicly traded company and its executives; and (5) Claimant's information bears a close nexus to certain charges brought by the Commission. In determining the appropriate award percentage, we also considered that while Claimant's information was significant, the Covered Action included charges that accounted for the majority of the Redacted reported by the company, which was not attributable to information provided by the Claimant, but rather related to other alleged misconduct by the company.

[J]ohnson and Smith participated in a worldwide scheme through Chimera Group Ltd.  The scheme operated as an advance fee scheme which involved the defendants as promoters who promised to pay the victims a sum of money at a later date in exchange for an upfront advanced payment.  Among other misrepresentations, Johnson and Smith and their co-conspirators told potential victims that their principal payments would be protected based on letters of credit and other documents that purported to be from a large financial institution.  However, these letters were fabricated.  The evidence also showed that the defendants used escrow attorneys, who were themselves part of the scheme, in order to give the victims the appearance that their money would remain secure until the defendants' promises had been kept.

The defendants stole at least $5 million from their victims.

CHALK, holding himself out as "Terrence Cash," was the Chairman of Greenlight Investment Partners and Greenlight Investment Circle, among other similarly named entities (together, "Greenlight").  The Greenlight companies offered customers "business, money, and wealth coaching" -- advice and training in investment planning and wealth management.  To certain of his coaching clients, CHALK also offered admission into the "Chairman's Fund" - purportedly, an elite investing arrangement under which clients would purchase equity stakes in Greenlight and CHALK would invest the purchase proceeds into individual ventures he had vetted.  As promised by CHALK, the ventures would generate a guaranteed, fixed return, often in excess of 12 percent annually, to be paid by check on a quarterly basis.

CHALK induced the investors to entrust him with their money - including, in several instances, the entire contents of their retirement accounts and pensions - while concealing from them the fact that, under his real name, he had been convicted for fraud-related offenses in this District in 2010.  Had his clients known his real name and researched him on the Internet, they would have found press releases detailing his conviction and sentencing for an array of fraudulent activity, which included fraudulently applying for loans, including in the name of a deceased relative, and directing the submission of fraudulent documents to a BMW car dealership from jail after his initial arrest in order to secure luxury automobiles for his associates.  This history would have dissuaded clients from investing with CHALK.

Instead, CHALK's victims each invested tens of thousands of dollars in the Chairman's Fund, which took in over $4 million overall.  Within months of the clients' investments, their promised return payments began to arrive erratically or not at all.  In fact, CHALK had not made all of the promised investments.  Despite having solicited more than $4 million in investments, CHALK routed no more than $1.2 million of that money into the promised ventures.  Instead, he had diverted much of the money into other Greenlight accounts, from which he spent lavishly on himself and his associates.  CHALK's spending included approximately $1.7 million on credit card bills for cards in his name, those of his associates, and business accounts from which clear personal purchases or business purchases wholly separate from investment activity had been made.  CHALK also transferred, out of the same accounts, tens of thousands of dollars to a criminal defense attorney who had handled a personal matter for him; over $70,000 to a luxury car dealer; approximately $30,000 to a retail jewelry retailer; over $20,000 to an incarcerated prison inmate; and approximately $17,000 to an NBA basketball team in what appear to have been season ticket payments.

[B]etween June 2017 and January of 2019, Abbas and others defrauded victims through a series of romance, business email compromise (BEC), and other scams designed to trick victims into wiring monies to bank accounts they controlled. A BEC scheme is a sophisticated fraud often targeting individuals and businesses involved in wire transfer payments. The fraud is carried out by compromising and/or "spoofing" legitimate business email accounts through social engineering or computer intrusion techniques, to cause victims to transfer funds to accounts controlled by the scammers. In romance scams, perpetrators generally create fictitious online personas to develop online romantic relationships with individuals in the U.S., and then leverage those relationships to obtain money and/or property. 

Abbas allegedly created sham corporate entities and opened bank accounts in the name of those entities. Under false pretenses, both individual and corporate victims were then instructed to wire funds into the accounts Abbas controlled. Some victims were in the process of buying homes and believed the funds were for that purpose. Others believed they were transferring funds on behalf of or for the benefit of their romantic partners. Corporate victims were targeted as part of the scheme as well and were deceived into remitting invoice payments to the accounts Abbas controlled. 

Shortly after receiving the victim funds, Abbas allegedly transferred the funds to overseas accounts, domestic personal accounts, or spent the funds on personal expenses.  

running a Ponzi-type scheme, recruiting more than 100 investors to purchase $13 million in membership units for $50,000 apiece.

His companies promised  investors 12% annual returns, paid quarterly, and "insured liquidity." However, instead of properly investing the money, the companies issued phony account statements and paid any investors who elected to receive their earnings quarterly out of the investments of later investors, rather than out of the earnings of the fund.

Mr. Howard falsely represented himself as a registered investment advisor and claimed his companies saw 20% annual earnings. Promising that investors could not possibly lose money due to insurance that offset poor performance, the defendant induced at least one investor to turn over his entire retirement savings to the fund.

• Securities Industry Commentator
• Bill Singer