Archive for June, 2009

Covered Call Option Strategy a Cover for a Ponzi Scheme

Tuesday, June 30th, 2009


The Securities and Exchange Commission (SEC) has charged Moises Pacheco, of Chula Vista, California, and his companies, Advanced Money Management, Inc. (AMM), and Business Development & Consulting Co. (BD&C), with securities fraud.  According to the SEC, Pacheco used five self-styled hedge funds - AP Premium Value Funds I through IV and Capital Partnership Group, to raise $14.7 million from more than 200 people.  Also according to the Commission, Pacheco’s used principal invested by later investors to pay supposed profit distributions to earlier investors, in classic Ponzi fashion. According to the SEC’s complaint: 


Believing a Lie?

Monday, June 29th, 2009

The Securities and Exchange Commission (SEC) charged Michael C. Regan and his firm, Regan & Company, for conducting a multi-million dollar Ponzi scheme and fraudulently raising over $15.9 million, and causing investors to lose at least $6.69 million through misappropriation and trading losses. (more…)


Friday, June 26th, 2009

Unfortunately, when it comes to scams, misappropriation is a common theme.  And although I’m not a scamster myself, I assume misappropriating is tricky business—depositing money that’s not yours into your own accounts and using company money to pay your bills, while making sure your co-workers don’t catch wind of what’s going on.  But when you have a fellow executive willing to condone the whole thing, and even set up the wire transfers, it makes it pretty simple.  (more…)

$11 Million Ponzi Scheme Halted

Thursday, June 25th, 2009

The Securities and Exchange Commission (SEC) filed an emergency action against David J. Hernandez, and his company NextStep Financial Services, Inc. for running a Ponzi scheme that raised more than $11 million from investors in at least 12 states, between at least February 2008 and the present. (more…)

What American Investors Can Learn from a Swiss Banker

Wednesday, June 24th, 2009


Less than ten days ago I was in Geneva, Switzerland working on an assignment for an Investor’s Watchdog client.  As part of the assignment, I interviewed a high level executive of a Swiss private bank.  Among the things I asked him was how his bank was able to avoid losing client money to Bernard Madoff when so many other Swiss bankers lost millions.  His answer reveals why his particular bank has done well despite the global economic downturn.


Madoff Feeder Charged with Fraud

Tuesday, June 23rd, 2009


Stanley Chais of Beverly Hills, California and New York, New York enjoyed a reputation as an investing wiz.  His California-based investment advisory business prospered for decades as investors clamored to get into one of his three investment partnerships, the Lambeth, Popham, and Brighton Funds.  In a case filed this week, the SEC claims that he did exactly squat, relying instead on his good friend Bernard Madoff, with whom Chais invested all of the assets of his three Funds, while charging his clients $250 million in fees.  ”Despite the fact that Chais turned all of the Funds’ assets over to Madoff, many of the Funds’ investors had never heard of Madoff before the collapse of his Ponzi scheme, and had not known that Chais invested with Madoff until Chais informed them after Madoff’s arrest.”


Wise Decision to Keep the SEC Around

Monday, June 22nd, 2009


The headlines of the last couple of weeks make it clear that the President has resisted the temptation to respond to the financial crisis by radically restructuring the U.S. regulatory structure.  The U.S. Securities and Exchange Commission will remain the chief protector of American investors. While some advocated the creator of a new super-regulator, it was wise to keep the existing structure in place while filling holes and expressly instructing the regulators to be on the lookout for emergence of circumstances that led us into the crisis that we are suffering through now. 


Sir Allen Arrested

Friday, June 19th, 2009


The FBI took Allen Stanford into custody yesterday on as-yet undisclosed criminal charges.  In February,  the Securities and Exchange Commission sued the Texas billionaire alleging that he operated a Ponzi scheme of staggering proportions.


Affinity Fraud and a Ponzi Scheme

Friday, June 19th, 2009

The Securities and Exchange Commission (SEC) has charged two California men, Peter C. Son and Jin K. Chung, with running an $80 million Ponzi scheme that targeted Korean-Americans.  (more…)

Prime Banks Scams Alive and Well

Thursday, June 18th, 2009

The U.S. Securities and Exchange Commission (SEC) has charged Morgan European Holdings ApS, a/k/a Money Talks, Inc. ApS (”MEH”), John Morgan, Marian Morgan, Bowman Marketing Group, Inc. (”BMG”), Stephen E. Bowman, and Thomas D. Woodcock, Jr., with running a prime bank scam.