Archive for April, 2008

Resume Inflation

Wednesday, April 30th, 2008

The SEC has accused Don L. Lambert - former CEO of Energytec, Inc. - with resume inflation.  Specifically, the SEC claims that Lambert failed to disclose in company filings that he pled guilty to securities fraud in 1994, that he had filed for bankruptcy multiple times, and that he had surrendered his license to practice law under threat of disbarment.  Lambert consented to a $50,000 penalty and an order barring him from serving as an officer or director of a public company.  (more…)

Rumor Has It . . .

Tuesday, April 29th, 2008

The SEC has charged Paul Berliner with malicious gossip.  Specifically, the SEC claims that Berliner, a Wall Street trader, sent text messages to other traders saying (falsely) that the Blackstone Group board was meeting to consider changes to its agreement to acquire Alliance Data Systems Corp (ADS) for $81.75 per share.  Berliner spread the rumor that Blackstone was going to propose a lower purchase price of $70 per share.  (more…)

Falling in Love

Monday, April 28th, 2008

Sometimes a broker convinces himself that a particular company - usually a new company - is headed for great heights.  The broker believes he has found the next Microsoft or Google.  He amplifies every piece of good news and ignores every warning sign.  He recommends that all of his customers invest in the stock, even at levels that represent dangerous over-concentration.  He invests his own money in it.  Each time the stock drops, he convinces himself and tells his customers that the drop represents a terrific ”buying opportunity.” (more…)


Monday, April 28th, 2008

A federal grand jury in California has indicted mortgage lender Cheryl Camus of running a Ponzi scheme.  Citing to a release issued by the U.S. Attorney’s office, Robert Salonga of the Contra Costa Times reports: (more…)

Financial Crime - The Entry Level Course

Friday, April 25th, 2008

Some financial frauds are so intricately planned and flawlessly executed that we could call them “impressive” if not for their criminal design and horrendous aftermath.  Those scams often have more than ten cooperating participants, some of whom make the sale, others who pose as employees - or even officers - of a well-known financial company (e.g., Citigroup, Credit Suisse) which is supposedly involved in the scam, and still others who pose as satisfied investors who have reaped the rewards of the investment being offered.  These scams bring to mind movies like The Sting and The Spanish Prisoner.  (more…)

Another ‘Mortgage Broker’ Exposed

Thursday, April 24th, 2008

The Securities and Exchange Commission (SEC) has charged a Las Vegas mortgage broker - Joseph Milanowski - with securities fraud.  According to the SEC, Malinowski — operating through a company called USA Commercial Mortgage Company dba USA Capital - raised over $150 million from 1900 investors by selling securities in the USA Capital Diversified Trust Deed Fund (the “Fund”). The SEC’s release states: (more…)

Bond Villain ‘Jaws’ Supports Man Accused of Fraud

Wednesday, April 23rd, 2008

Baby boomers will no doubt remember the enormous man with the metallic teeth who chased 007 across the globe and even into space.  Richard Kiel played the character -Jaws.  Mr. Kiel has written a letter pleading for leniency for Robert Armstrong - former vice president of Airfleet Resources Florida - who has pled guilty to securities fraud in connection with a scam involving sales of flight time on private aircraft.  Tampa Bay Online described the scam as follows: (more…)

Investment Adviser to the Stars Accused of Fraud

Tuesday, April 22nd, 2008

Kim Christensen, of the Los Angeles Times reports:

NBA legend Jerry West, Los Angeles Dodgers third baseman Nomar Garciaparra and a bevy of other major sports figures have accused a celebrity investment adviser of gouging them for more than $3 million in excessive commissions on bond trades. (more…)

FBI Warns of Increase in Investment Fraud

Monday, April 21st, 2008

According to FBI Director Robert Mueller the number of corporate fraud cases it has investigated has increased by more than 80% since 2003.  At a meeting of the American Bar Association’s Litigation Section Mueller said: (more…)

Big Names No Protection

Friday, April 18th, 2008

ABC News is reporting that Wachovia Bank processed over $140 million in transactions for corporate clients who were engaged in telemarketing fraud. 

Wachovia is said to have collected millions of dollars in fees, and despite numerous warnings from inside and outside of the bank, apparently never looked into the sources of the fraudulent transactions. (more…)