No Excuses

It isn’t the substance of an excuse that matters, it is the fact of the excuse

Just when we thought we’d seen the last of the Madoff era Ponzi schemes, comes a criminal indictment in a case that alleges a scam operating from 1995 to 2011. According to LoanSafe.org: (more…)

Anglican Bishop On Trial in Ponzi Case

An impressive resume says very little about whether a fallible human will make ethical decisions under pressure.

Pretend that I’m an investment adviser. You come into my office and I tell you that I’ve just met with a man who has an investment that seems perfect for you. It involves making loans to businesses at very high interest rates. The investment has a track record of success. Now, consider whether the following facts would add credibility to the investment: (1) the promoter of the investment is a licensed attorney, and (2) the promoter of the investment is also an Anglican Bishop. Those facts convinced many investors to invest in an investment called the British Lending Program, which was offered by Missouri attorney and Anglican Bishop Martin Sigillito. He is on trial now in St. Louis. According to stltoday.com: (more…)

What Regulators Do Well and Not So Well

Those who ask the SEC to answer for the epidemic of investment fraud that has already begun to spread across the investing landscape misunderstand the role of the investment cops.

I have seen it from the inside. When the SEC believes that it has identified an ongoing investment fraud it spares no effort to gather evidence to find out whether those suspicions are correct and, if so, to get into Court seeking an order to shut down the alleged fraud and freeze assets that might otherwise find their way out of the country or into the pockets of people and organizations who have agreed to hold them for the accused. The SEC took such an action last week, halting what it believes to be an ongoing fraud in several St. Louis-based private investment funds. According to the SEC’s press release: (more…)

Misery is Misery, With or Without Company

The current generation of investment frauds will last longer and be harder to spot than their pre-Great Recession counterparts.

If you asked them to name all of the investment schemes that they can remember, most people can name Madoff, some can add Stanford, and still others a scam that has made local headlines. Almost no one can name ten scams. Yet, there are hundreds of new scams revealed every year. And for every scam revealed, there are two or more that won’t be revealed until they’ve operated for several more years, robbing thousands of investors of millions of dollars. (more…)

Have You Heard the One About the Attorneys and the Bishop?

You are hardwired to fall for investment fraud, but also hardwired to believe that you are immune to it.

In a case that reminds us that investment fraud has gone multi-national, a federal grand jury in St. Louis has indicted men from Missouri, Kansas, and the United Kingdom in connection with an alleged $52 million Ponzi scheme.  Defendant Martin Sigillito is an attorney who lives in a St. Louis suburb.  He is also an ordained bishop in the American Anglican Convention.  Defendant James Scott Brown is an attorney who lives in a Kansas City suburb.  Defendant Derrick J. Smith is a real estate speculator in Oxfordshire, United Kingdom.  According to the indictment, the defendants told investors that their money would be invested in various real estate projects through a program called the British Lending Program.  According to the St. Louis Business Journal: (more…)

Con Man Who Preyed on Elderly Pleads Guilty

If you have an elderly relative, you can be certain that he or she will be targeted by a con man.

We posted earlier this week about a prime bank scam out of Colorado.  Now, comes word of yet another one, this one in Missouri.  Last week, Carl R. Todd of Raymore, Missouri pled guilty to conspiracy to commit wire fraud for selling a variation of the prime bank scam to elderly Missouri investors. According to a story in InfoZine: (more…)

Beware Your Friendly Neighborhood Insurance Broker

But, just like brokers and investment advisers, those insurance brokers work in a system that constantly pulls them toward abusing those who have placed trust in them.

Most of our blog posts concern stockbrokers and registered investment advisers; people who are, or should be, registered under federal securities laws.  Today’s post reminds us that you are just at much at risk from insurance brokers.   (more…)

Anything for Another Fat Annuity Commission

Find out all you can about the broker who claims to have your best interests at heart, or risk learning the hard way that he is putting his own financial interests ahead of yours.

Darla Mercado of Investment News brings us the story of insurance agent James Otto of Overland Park, Kansas.  She reports that Missouri’s secretary of state has issued a cease-and-desist order against Otto, formerly an agent for Bankers Life and Casualty Co. (Bankers Life), ”alleging that he used an unregistered in-house brokerage to help liquidate clients’ accounts and use the proceeds to buy annuities.”  According to Mercado: (more…)

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