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FRAUD: CFTC Sues Bitcoin Ponzi Scheme Operator

CFTC Sues Bitcoin Crytocurrency Ponzi Scheme Operator

By Nicole D. Prysby, Senior Attorney, National Legal Research Group The price of Bitcoin has soared in recent months, from approximately $900 in January 2017 to a current price of over $15,000. But even before the 2017 increase, Bitcoin had periods where its value rose sharply. For example, in 2013, it went from about $15 to $800. Bitcoin’s short-term gains have made it a very attractive hook for would-be Ponzi scheme developers. In fall 2017, the Commodity Futures Trading Commission (“CFTC”) sued Gelfman Blueprint, Inc. (“GBI”), and GBI’s Chief Executive Officer (“CEO”) for operating a Bitcoin Ponzi scheme that allegedly defrauded...

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Man behind $1M scam gets 7 1/2-year sentence

By Mitchell Kirk – Pharos Tribune (Logansport, Indiana) A former Logansport man received a 7 1/2-year sentence in federal court on Thursday and was ordered to pay back the $985,000 he's accused of fraudulently obtaining. Larry Westby, 65, Vanderbilt, Michigan, was indicted in August 2016 on charges of mail fraud, money laundering and fraud in the offer and sale of securities. The FBI, IRS and Indiana Secretary of State's office accused the former Logansport resident of fraudulently obtaining about $985,800 from investors and causing losses to investors of about $903,128. Westby started a company called LMW Inc. he based in Indianapolis with the reported...

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Bitcoin scam? Here are 3 signs a cryptocurrency investment, ICO or altcoin is a fraud

Bitcoin scam? Here are 3 signs a cryptocurrency investment, ICO or altcoin is a fraud

By James Dennin of Mic.com When perpetrating any kind of scam, it helps to move in a space that’s hard for everyday consumers to understand. It’s safe to say digital currencies, which were confusing to begin with and now come in more than a thousand different varieties, offer fertile ground for fraudsters. One recent scam story making the news pertains to the aptly-named Confido, a new cryptocurrency startup that successfully raised more than $300,000 in investment money through an initial coin offering. Then, according to reports in The Next Web and Inc, the company quickly disappeared. Altogether the startup was able to...

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7 Best Practices For Wealth-Managing Fiduciaries

7 Best Practices For Wealth-Managing Fiduciaries

By Stuart Riemer (Law360.com) As the U.S. Department of Labor has tried to issue regulations for financial professionals who give retirement advice, and the U.S. Securities and Exchange Commission has previously taken a similar stance for financial advisers under their jurisdiction, the debate over who in the financial services industry should be required to act as a fiduciary has been getting more intense. It’s a contentious issue to be sure, but whether you are charged with managing someone else’s wealth as a trustee, an executor or a financial adviser operating from a fiduciary perspective, having the client’s needs come first is always...

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Former heavy-hitter stockbroker Buck charged with fraud

Former heavy-hitter stockbroker Buck charged with fraud

By Indianapolis Business Journal staff Thomas. J. Buck, a former top investment broker who was fired by the local office of Merrill Lynch in 2015 after nearly 34 years with the firm, is now facing serious prison time, according to federal officials. Buck, 63, has agreed to plead guilty to one count of securities fraud and faces up to 25 years in prison, U.S. Attorney Josh Minkler’s office announced Tuesday morning. Buck also agreed to pay $5 million as part of a civil settlement he reached with the U.S. Securities and Exchange Commission. Federal investigators say Buck defrauded clients by charging excessive commissions...

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Ex-SEC Chair Warns Of Adviser Exam Shortfall ‘Disaster’

Ex-SEC Chair Warns Of Adviser Exam Shortfall Disaster

By Ed Beeson of Law360.com Former U.S. Securities and Exchange Commission Chair Mary Jo White on Friday sounded an alarm about the agency’s inability to conduct regular inspections of most registered investment advisers, calling it “a disaster waiting to happen” if the pace can’t be picked up. Speaking at a Practising Law Institute event in New York, White didn’t elaborate on what she meant by disaster, but she said it was one of the things that greatly concerned her during her tenure as Wall Street’s top cop. There are currently about 12,500 advisers registered with the SEC, but the agency’s exam staff are...

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SEC Settles Ponzi Scheme Suit Against Ex-NFLer, Biz Partner

SEC Settles Ponzi Scheme Suit Against Ex-NFLer, Biz Partner

By Christine Powell of Law360.com A Massachusetts federal judge greenlit a deal Friday resolving the U.S. Securities and Exchange Commission’s allegations that a former NFL player, his business partner and three companies they founded together ran a $31.7 million Ponzi scheme that involved convincing investors they were helping provide short-term loans to professional athletes. U.S. District Judge Indira Talwani entered final judgment just one day after the SEC moved for the approval of the settlement in its civil enforcement action against William D. Allen, who played for the New York Giants, the Miami Dolphins and the New England Patriots; former banker Susan...

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FINRA Fines JPMorgan $1.25M For Faulty Background Checks

FINRA Fines JPMorgan $1.25M For Faulty Background Checks

By Evan Weinberger of Law360.com A JPMorgan Chase & Co. securities subsidiary on Tuesday agreed to pay $1.25 million in a settlement alleging that the firm did not perform adequate background checks on around 95 percent of its support staff. The Financial Industry Regulatory Authority said that J.P. Morgan Securities LLC did not perform timely or sufficient background checks on approximately 8,600 of its “nonregistered associated persons,” including sales assistants, information technology staff and other back office workers, between January 2009 and May 2017. “FINRA member firms play an important gatekeeper role in keeping bad actors from harming investors. Firms have a clear responsibility to...

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Indiana investment adviser sentenced to prison for fraud

Indiana investment adviser sentenced to prison for fraud

From The Indiana Gazette Acting U.S. Attorney Soo C. Song announced Monday that former Indiana investment adviser Bernard Parker was sentenced to 87 months imprisonment, three years supervised release and ordered to pay $1,212,663.93, on his conviction at trial of one count of securities fraud, one count of mail fraud and four counts of filing false tax returns. Parker, 56, was sentenced by U.S. District Judge Reggie B. Walton. According to Assistant U.S. Attorneys Robert S. Cessar and Rachael L. Mamula, who prosecuted the case, the evidence presented at trial established that Parker, the principal of Parker Financial Services, solicited his clients by...

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Fake Hedge Fund Manager Accused Of Running Ponzi Scheme

Below is a recent article from Law360 that talks about a Ponzi-schemer defrauding his friends, clients, and their families out of nearly 19 million dollars.  The facts of this case are classic: 1)      Promises to get rich quick, 2)      Preying on folks who are trusting and unsophisticated, 3)      Lying about fictitious profits and positive returns while actually generating huge losses, and 4)      All or nearly all of the money is gone by the time the fraudster is caught. Starr Austen & Miller has represented hundreds of victims of such Ponzi schemes since 1982.  If you or a loved one is the victim of investment fraud, call Starr Austen &...

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