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Securities Fraud

Three members of The Dane Group sentenced for securities fraud

Three members of The Dane Group sentenced for securities fraud

By Current Publishing -- currentinwestfield.com According to a press release sent to Current from the Office of the Indiana Secretary of the State, all three members of The Dane Group have been convicted of security fraud. The Dane Group is a capital investment firm in Fishers. Bruce McIntyre, Shelly Guzman and Fennis Bledsoe formed the company in 2012 to provide capital to expanding businesses. From 2013-2014, they sold unregistered short-term promissory notes to at least four Hoosiers totaling more than $375,000. According to bank records, the funds were used for personal expenses. Bledsoe was the last of the three to be sentenced, and he...

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Hedge Fund Manager Cops Guity Plea for Multi-Million Dollar Ponzi Scheme

Hedge Fund Manager Cops Guity Plea for Multi-Million Dollar Ponzi Scheme

Recently a Virginia hedge fund manager pled guilty to a $9 million Ponzi scheme. The case dealt with over 50 clients who invested in the investment manager’s hedge fund where he bragged of earning returns regularly beating the S & P 500. In reality, he both spent his clients’ monies on his living expenses and used the monies to cover losses he generated in trading activities. In typical Ponzi scheme fashion, he used new investor funds to pay off older investors who decided to cash out....

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Jury Awards $15 Million in Punitive Damages Against MetLife for Ponzi Scheme Involvement

Last year MetLife and one of its subsidiaries were assessed $15 million in punitive damages by a jury for its failure to discover one of its agents was selling unregistered securities along with life insurance policies. The unregistered securities were actually promissory notes which were allegedly invested in a $200 million Ponzi scheme. The plaintiff, Christine Ramirez, claimed that MetLife’s subsidiary New England Life Insurance Company had an agent who was selling her these unregistered securities at the same time he was selling her life insurance. ...

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What is the “Fraud-on-the-Market” Doctrine of Securities Fraud?

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In the United States Supreme Court case of Basic, Inc. v. Levinson, 485 U.S. 224 (1988), the Court ruled that in certain circumstances a securities class action would be appropriate notwithstanding what otherwise would be individualized issues of reliance.  Basic created the Fraud-on-the-Market Doctrine. The Fraud-on-the-Market Doctrine pertains to the reliance element of the federal section 10(b) claim.  Because 10(b) claims require reliance, courts historically had found class wide treatment was inappropriate in Section 10(b) claims because individualized reliance issues would predominate, precluding class certification under Federal Rule 23(b)(3).  In Basic, the United States Supreme Court created a solution to this...

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SEC’s Office of Compliance Inspections and Examinations Identifies Frequent Advisor and Brokerage Firm Shortcomings

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Starr Austen & Miller has represented over a thousand victims of either investment advisor negligence or stockbroker fraud.  In almost every case the guilty advisor or broker failed to comply with his firm’s own compliance manual.  Typically, such conduct has been ongoing for years and the brokerage firm has chosen to pay lip service to its compliance rules and procedures by not truly watching its broker with sufficient care or otherwise properly supervising the broker’s bad conduct.  In essence, the compliance manual becomes a worthless piece of paper the brokerage firm shows the regulators in an effort to show that...

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Indiana settles with securities firm over agent who ran Ponzi scheme

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By: Indianapolis Business Journal Staff and Associated Press The state has reached a $275,000 settlement with NYLife Securities LLC over the activities of an Indiana wealth manager who killed himself in 2013 while being investigated for operating a Ponzi scheme that took millions of dollars from dozens of investors. Indiana Secretary of State Connie Lawson announced the settlement Thursday. Former NYLife agent Richard Schwartz operated a Kokomo-based company called RAS & Associates that sold investments totaling $16.3 million to 53 Indiana investors. The state says most of that money was never invested but went to support Schwartz’s “extravagant lifestyle” and an apparent gambling problem. Attorney...

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Securities watchdog bans second broker in alleged Veros Ponzi scheme

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By: Jared Council of Indianapolis Business Journal Financial industry regulators have permanently barred a local broker alleged to have participated in a Ponzi scheme. The Financial Industry Regulatory Authority said Tobin Joseph Senefeld of Indianapolis has been disbarred from associating with any FINRA member institution, according to its monthly disciplinary report released last week. The sanction is related to a 2015 civil suit filed by the Securities and Exchange Commission that claimed Senefeld and two others operated a multimillion-dollar Ponzi scheme involving farm loans. According to FINRA, Senefeld was banned because he refused to provide on-the-record testimony about the Ponzi scheme allegations. Senefeld,...

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New Albany, Indiana Man Arrested on Multiple Counts of Securities Fraud and Theft

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By Lindsey Holmes of tristatehomepage.com A New Albany man is in jail Thursday night after a 13-month investigation revealed he defrauded nearly $535,000 from numerous Dubois County Residents. In October 2015, a complaint was filed with the Indiana Secretary of State, Securities Division after a woman became concerned about the financial investments made on behalf of her mother. A criminal investigation was initiated by the Indiana State Police into the transactions by the woman’s financial advisor, 58 year old Stephen Recker, formerly of Jasper and currently of New Albany. Through the course of the investigation and as a result of the initial complaint, investigators...

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U.S. Takes Down Call-Center Financial Scam

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Officials allege people impersonating IRS, immigration officials extracted more than $250 million from victims By Miriam Jordan of The Wall Street Journal Federal authorities said Thursday they had dismantled a massive call-center scheme perpetrated by individuals in the U.S. and India who bilked thousands of Americans out of hundreds of millions of dollars by posing as Internal Revenue Service and Department of Homeland Security officials. An 81-page indictment names 56 people in the U.S. and India and five call centers in Ahmedabad, India, allegedly involved in the fraud. They were charged in a Texas federal district court in Houston with crimes including impersonation...

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SEC sets record in enforcement actions against investment advisers

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Uptick in adviser crackdown attributed to better data analytics and agency's new unit focused on asset management By Mark Schoeff Jr. of InvestmentNews.com The Securities and Exchange Commission filed a record number of enforcement cases against investment advisers and investment companies over the last year, the agency announced Tuesday. The SEC pursued 160 cases against advisers and firms, including 98 that were standalone — as opposed to follow-up actions or cases based on delinquent regulatory filings. Both numbers are records, the SEC said. The enforcement statistics for fiscal 2016 include the period from Oct. 1, 2015, through Sept. 30. The SEC also filed a record number of...

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