Archive for December, 2007

Unregistered Entities Top List of Complaints to the SEC

Monday, December 31st, 2007

Greg Saitz of the Newark Star-Ledger  is reporting:

that the largest number of investor complaints to the SEC’s office of investor education and advocacy deal with “solicitations of investors by unregistered entities that appear to be involved in boiler room and secondary advance fee schemes.”

In an article run this morning, Saitz gives a list of New Jersey-based companies that have been the subject of alerts by securities regulators in other countries, including:   (more…)

Oil and Gas Scams Alive and Well: Sales Techniques Parallel Stockbroker Techniques

Monday, December 31st, 2007

The North American Securities Administrators Association (NASAA) has issued an alert warning investors about continued risk from oil and gas scams.  The alert is especially enlightening as it takes a look into the mind of the scam artist.   (more…)

Idaho Case Highlights Continued Risk to Church Members

Sunday, December 30th, 2007

The Idaho Department of Finance (IDF) has charged Streamline Financial, LLC and Michael Breinholt, of Boise, with violations of the registration and anti-fraud provisions of the Idaho Uniform Securities Act.  According to the Idaho authorities, the defendants sold over $3 million in promissory notes by telling investors that the notes were “risk free.”  IDF also alleges that the defendants failed to dislcose that company insiders and those close to the company would receive higher rates of return on the same promissory notes. Breinholt is a Mormon, and IDF alleges that most of the investors were members of the church he atteneded. (more…)

Alabama’s Top Securities Cop Awaits Extradition of California Men

Saturday, December 29th, 2007

Investors in Alabama have no better friend than Joe Borg (Borg), Alabama’s Securities Commissioner.  Honored this year with the highest award given by the Public Investors Arbitration Bar Association (PIABA), Borg has been protecting investors and prosecuting those who prey on them for many years.  He is the immediate past president of the North American Securities Administrators Association (NASAA) and has testified before Congress many times on investor protection issues.

Borg is now awaiting extradition of Randy Morton, Daniel Caterino and Candice Lynn Lewis of Orange County, California.  The three are accused of running a scam that targeted Alabama residents.  They were indcited in November for using unregistered sales agents to solicit investments from Alabamians for body imaging centers in California, Arizona and Texas. (more…)

Corporate Identity Theft is the Latest Twist on Pump and Dump Scams

Friday, December 28th, 2007 reported today on a trend in the scam industry.  Scam artists identify inactive corporations, forge documents to name themselves as “new directors” of the corporation, then commence their “pump and dump” scam with their stolen corporate identity. (more…)

SEC Halts Another Fraudulent Unregistered Offering

Friday, December 28th, 2007

The Securities and Exchange Commission (SEC) has charged Navigators International Management Co., Ltd. (Navigators), James R. Spurger and Benjamin W. Young, Jr. with securities fraud, conducting unregistered securities offerings, and acting as unregistered broker-dealers.  Navigators is a Bahamian company run by Spurger and Young.  Spurger lives in the Houston area, while Young is a U.S. citizen living in El Salvador. (more…)

FINRA’s New Expungement Rule

Thursday, December 27th, 2007

The Financial Industry Regulatory Authority has approved a rule that will make it tougher for stockbrokers to whitewash their records.  As reported in the New York Times, and covered on Investor’s Watchblog, for two decades many customer complaints have not been added to stockbrokers’ records.  That is because brokers were allowed to negotiate for expungement of their record as a condition of settlement.  Expungement does not mean that a broker is innocent of the charges made by the customer.  It means only that the firm thought it important to keep the broker’s record clean so that he or she can continue to attract customers.  (more…)

Pennsylvania Ponzi Preyed on Elderly for More than a Decade

Wednesday, December 26th, 2007

We are prone to believe that we could never fall for a Ponzi scheme, and that securities regulators will stop ongoing schemes before they can reach us or someone we care about.  A recent case from Pennsylvania illustrates otherwise. 

Craig H. Reinhard and Debra Bzik, of Allentown, Pennsylvania, operated a company called IDPM Group, Inc., a supposed benefit counseling service and insurance agency.  The pair told potential investors, many of whom were elderly, that they were investing in federally-insured certificates of deposit.  (more…)

NASAA Supports the Arbitration Fairness Act of 2007

Wednesday, December 26th, 2007

On December 12, 2007, Tanya Solov, Director of the Illinois Securities Department, testified before a Senate Committee considering Senate Bill 1782, the Arbitration Fairness Act of 2007.  All investors should support this bill, which restores Americans’ constitutional right to take a dispute to the civil justice system.   

Since the Supreme Court’s decision in Shearson/American Express Inc. v. McMahon, 482 U.S. 220 (1987), American investors have been forced to play on the securities industry’s home turf in the event of a dispute, arbitrating in a system operated by FINRA.  Proving the unfairness of forcing investors into the securities industry’s stadium, Solov testified: (more…)

SEC Gets Judgment Against Internet Stock Hyper

Tuesday, December 25th, 2007

Nicholas A Czuczko was the operator of an Internet website —  He touted certain stocks as “mega bonus buys.”  According to the SEC, Czuczko defrauded investors by secretly selling the stocks he recommended that investors buy.  The SEC’s complaint alleges: (more…)