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If You Want A Different Result . . .

On September 7, 2012, in Ponzi schemes, SEC, Scams, Securities Industry (general), The Vigilant Investor, by IW Dog

Scientists tell us that the battle isn’t so much logical thought versus emotions as it is conscious thought versus subconscious, hard-wired cognitive biases.

The Washington Times wrote this week about Ponzi schemes. They noted that the SEC has filed enforcement actions against four suspected Ponzi schemes in the past two weeks alone, and quoted Lori Schock, the Director of the SEC’s Office of Investor Education and Advocacy: “Con artists are very persuasive when it comes to convincing people to turn over their money for phantom riches. Their emotions get built up into it, and they stop thinking logically.” While Ms. Schock is correct, there is more to the problem than emotions overriding logical thought. But, before we get to that, please read more of the story from The Washington Times: (more…)

SEC Squashes Gold Bug

On April 2, 2012, in Gold, Minnesota, Minnesota, Ponzi schemes, Scams, Securities Industry (general), The Vigilant Investor, by IW Dog

Scams often track the headlines.

“Scam artists track the headlines more closely than the most energetic news junkie.” — The Vigilant Investor, p. 121

Gold prices have doubled since January 2009. News like that catches the attention of even the most casual investor. People start wondering whether they have missed an opportunity, or whether it isn’t too late to jump onto a rising rocket. It’s that kind of public attention that launches hundreds of scams every year. The SEC believes that it has found an investment that took advantage of rising gold prices. According to the SEC’s press release: (more…)

Tagged with: broker • Broker Snapshot • Dave Marion • David L. Marion • David Marion • due diligence • endowment • financial adviser • financial advisor • fraud • hedge fund • Huddleston • International Rarities • International Rarities Corporation • International Rarities Holdings Inc. • investment adviser • investment advisor • Investors Watchdog • Investor’s Watchdog • IR Holdings • misappropriation • Ponzi • QualifEye • RIA • scam • scheme • SEC • Securities and Exchange Commission • The Vigilant Investor • Winnow

FCPA Case Reveals the Central Equation

On March 23, 2012, in Foreign Corrupt Practices Act, SEC, Securities Industry (general), The Vigilant Investor, by IW Dog

The fines that big brokerage firms pay for mistreating their customers rarely exceed their annual expenditures on office supplies.

Among the statutes that the SEC enforces is the Foreign Corrupt Practices Act (FCPA), which makes it illegal for American companies to bribe foreign officials. There is no law more unpopular with U.S. companies who make money overseas. That’s because bribery is an accepted and expected part of business deals in some parts of the world, and some of the international companies against whom the U.S. companies compete may not be prohibited from offering bribes by the laws of their own country. (more…)

Tagged with: broker • Broker Snapshot • Constant Patrol • due diligence • endowment • FCPA • financial adviser • financial advisor • Foreign Corrupt Practices Act • fraud • hedge fund • Huddleston • investment adviser • investment advisor • Investors Watchdog • Investor’s Watchdog • James J. Ruehlen • James Ruehlen • Jim Ruehlen • Mark A. Jackson • Mark Jackson • Noble Corporation • pension fund • Ponzi • Private Equity • QualifEye • scam • scheme • SEC • Securities and Exchange Commission • The Vigilant Investor • Thomas F. O’Rourke • Tom O’Rourke • Winnow

Accountants - A Love Story

On February 14, 2012, in Investor Protection, Scams, The Vigilant Investor, by IW Dog

There is one group of accountants who get rave reviews, who even inspire use of the “L” word.

When you ask people what they think of their accountant, if they are very pleased they’ll usually say he or she is “good,” “very competent,” or “solid.” You rarely hear superlatives used in assessments of accountants, because those of us whose skills with numbers are more pedestrian can’t fully appreciate what they do. But there is one group of accountants who get rave reviews, who even inspire use of the “L” word. Given that it is Valentine’s Day, today seemed like a proper time to praise those number crunchers about whom people say, “I love my accountant.” (more…)

Tagged with: accountant • accountants • broker • Broker Snapshot • Constant Patrol • due diligence • endowment • financial adviser • financial advisor • fraud • hedge fund • Huddleston • investment adviser • investment advisor • Investors Watchdog • Investor’s Watchdog • misappropriation • pension fund • Ponzi • prime bank • QualifEye • RIA • scam • scheme • SEC • Securities and Exchange Commission • The Vigilant Investor • Winnow

Add Bhutan

On December 13, 2011, in The Vigilant Investor, by IW Dog

The characters who offer double-your-money investments or Nigerian-prince-asking-to-borrow-your-bank-account opportunities are the characters who flunked out of scam school, the absolute dregs at the bottom of the con artist talent pool.

If there was any doubt that investment fraud reaches to every corner of the globe, a story from Bhutanese paper Kuensel resolves it. The paper is reporting on a Ponzi scheme that took 71 million ngultrum ($1.3 million) from 539 citizens of Bhutan. The story reads in part: (more…)

Tagged with: bhutan • Broker Snapshot • Constant Patrol • due diligence • endowment • financial adviser • financial advisor • fraud • hedge fund • Huddleston • investment adviser • investment advisor • Investors Watchdog • Investor’s Watchdog • pension fund • Ponzi • Private Equity • QualifEye • RIA • scam • scheme • The Vigilant Investor • Winnow

Borrowing From Giuliani, Khuzami Looks for Fudge-Smeared Credentials

On December 8, 2011, in Investment Advisers, SEC, Scams, Securities Industry (general), The Vigilant Investor, by IW Dog

I was thrilled to read that SEC Enforcement has begun to look for fudge smeared resumes at registered investment advisers.

In the public speeches I give about effective due diligence techniques, I show the audience how to check on an investment promoter’s educational credentials. You’d be surprised how often they are far less impressive than represented. You can understand why. People respond to good credentials, and the investment management business is competitive. So, more advisers than you would think fudge their credentials to make them just a bit more impressive; sometimes a lot more impressive. (more…)

Tagged with: broker • Broker Snapshot • Constant Patrol • due diligence • endowment • financial adviser • financial advisor • fraud • Giuliani • hedge fund • Huddleston • investment adviser • investment advisor • Investors Watchdog • Investor’s Watchdog • Khuzami • pension fund • Ponzi • Private Equity • QualifEye • RIA • Robert Khuzami • scam • scheme • SEC • Securities and Exchange Commission • The Vigilant Investor • Winnow

Games Without Frontiers

On December 2, 2011, in Scams, Securities Industry (general), The Vigilant Investor, by IW Dog

Ordinary people can cooperate across borders and are not bound by the regulations that constrain police agencies.

Where did investment fraud start? Is it an American invention, like the Cheeseburger, or an import from our ancestors across the pond? Did it spring from the Fertile Crescent or the Himalayas and make its way west across some well worn trade routes? The Chinese invented gun powder and we have the ancient Babylonians and Arabs to thank for algebra. But who should we blame for investment fraud? Before we answer the question, let’s look at a case that proves that there is no where on earth where fraud does not thrive. According to M&C: (more…)

Tagged with: broker • Constant Patrol • due diligence • endowment • financial adviser • financial advisor • fraud • hedge fund • Huddleston • investment adviser • investment advisor • Investors Watchdog • Investor’s Watchdog • Page Perry • Page Perry LLC • pension fund • Ponzi • Private Equity • QualifEye • RIA • scam • scheme • The Vigilant Investor • Winnow

The Ponzi Next Door

On December 1, 2011, in Georgia, Georgia, Ponzi schemes, Prime Bank Scams, SEC, Scams, Securities Industry (general), The Vigilant Investor, by IW Dog

We are pre-wired to file the ubiquity of fraud in a far corner of our brain marked “Do Not Open Until It’s Too Late.”

Less than 10 miles from my house, two people ran a Ponzi scheme that robbed more $27 million from more than 100 investors. Once their scheme came to light, the FBI swept in and the U.S. Attorney’s Office prosecuted. The two, Myra J. Ettenborough, 56, of Roswell and Geoffrey A. Gish, 57, of Lawrenceville, were sentenced to prison this week. Ettenborough will spend the next 7 years in federal prison. Gish got a stiffer sentence: 20 years. If he behaves himself behind bars, he might get out before his 75th birthday. According to a story in the Roswell Patch: (more…)

Tagged with: broker • Constant Patrol • due diligence • endowment • financial adviser • financial advisor • fraud • Geoffrey A. Gish • Geoffrey Gish • hedge fund • Huddleston • investment adviser • investment advisor • Investors Watchdog • Investor’s Watchdog • Jeff Gish • Myra Ettenborough • Myra J. Ettenborough • Page Perry • Page Perry LLC • pension fund • Ponzi • prime bank • Private Equity • QualifEye • RIA • scam • scheme • SEC • Securities and Exchange Commission • The Vigilant Investor • Weston Rutledge • Winnow

It Isn’t a Fair Fight

On November 25, 2011, in New York, New York, Ponzi schemes, SEC, Scams, Securities Industry (general), The Vigilant Investor, by IW Dog

Our brains are wired such that the thought doesn’t occur to us.

We never think that the very impressive man or woman describing a promising investment is really an investment criminal trying to steal our assets. Our brains are wired such that the thought doesn’t occur to us. But, even if you are fully aware of the very real danger from folks who don’t “seem” dangerous at all, you are prone to believe that the battle is a game of one-on-one; that you’d never get more than one person to agree to be part of something so dastardly. Unfortunately, history has shown us otherwise, as has a recent story arising from the biggest investment fraud in history. According to a press release from the SEC: (more…)

Tagged with: Annette Bongiorno • Bernard L. Madoff Investment Securities • Bernard L. Madoff Investment Securities LLC • Bernard Madoff • Bernie Madoff • BMIS • broker • Constant Patrol • David Kugel • due diligence • endowment • financial adviser • financial advisor • fraud • hedge fund • Huddleston • investment adviser • investment advisor • Investors Watchdog • Investor’s Watchdog • JoAnn Crupi • Madoff • pension fund • Ponzi • QualifEye • RIA • scam • scheme • SEC • Securities and Exchange Commission • The Vigilant Investor • Winnow

Happy Thanksgiving from Investor’s Watchdog

On November 24, 2011, in The Vigilant Investor, by IW Dog

We are grateful, also, for the approximately half of our readers who do not celebrate Thanksgiving.

Happy Thanksgiving! In addition to the blessings of friends and family, we at Investor’s Watchdog are thankful for the thousands of people who read our blog each week and take time to leave a comment. Sometimes those comments come from those who lost money to a scam. Other times they come from former employees who tell us what frauds look like from the inside. Every comment helps our readers better avoid the thousands of scams that litter the investing landscape. (more…)

Tagged with: Broker Snapshot • Constant Patrol • due diligence • endowment • financial adviser • financial advisor • fraud • hedge fund • Huddleston • investment adviser • investment advisor • Investors Watchdog • Investor’s Watchdog • pension fund • Ponzi • Private Equity • QualifEye • RIA • scam • scheme • SEC • Securities and Exchange Commission • The Vigilant Investor • Winnow

An Alleged Ponzi Aimed at the 99 Percent

On November 23, 2011, in District of Columbia, Florida, Ponzi schemes, Promissory Notes, SEC, Securities Industry (general), The Vigilant Investor, by IW Dog

Scamsters who target middle income investors love the PowerPoint pitch.

For the most part, Bernie Madoff’s victims were rich; hedge fund frauds typically target the wealthy. The dozens of pension funds that will lose money to a Madoff-like fraud this year have billions to invest. From a scamster’s perspective, this makes sense. You can’t steal money from those who don’t have it. But, the rich aren’t the only victims of investment fraud. As we discuss in The Vigilant Investor, there is a scam for every income level. An SEC enforcement action out of the nation’s capital highlights an alleged scam that targeted middle class investors. According to the SEC’s press release: (more…)

Tagged with: Ben Dalley • Benjamin C. Dalley • Benjamin Dalley • Bill Mitchell • broker • Broker Snapshot • Constant Patrol • due diligence • endowment • financial adviser • financial advisor • fraud • Garfield M. Taylor • Garfield Taylor • Garfield Taylor Inc. • Gibraltar Asset Management • Gibraltar Asset Management Group • Gibraltar Asset Management Group LLC • hedge fund • Huddleston • investment adviser • investment advisor • Investors Watchdog • Investor’s Watchdog • Jeff King • Jeffrey A. King • Jeffrey King • Maurice G. Taylor • Maurice Taylor • pension fund • Ponzi • Private Equity • QualifEye • Randolph M. Taylor • Randolph Taylor • Randy Taylor • RIA • scam • scheme • SEC • Securities and Exchange Commission • The Vigilant Investor • William B. Mitchell • William Mitchell • Winnow

Owning a Bit of Facebook and Groupon

On November 22, 2011, in New York, New York, SEC, Scams, Securities Industry (general), The Vigilant Investor, by IW Dog

People who’ve read The Vigilant Investor would not have invested in this alleged scheme.

How’d you like to be one of the first to own public shares of Facebook and Groupon? That’d be a hard proposition to say “no” to, wouldn’t it? If you could offer people that opportunity, they’d come running. Last week the SEC shut down an alleged scam that offered just that. According to the SEC’s press release: (more…)

Tagged with: Ann Mattera • broker • Broker Snapshot • Constant Patrol • due diligence • endowment • Facebook • financial adviser • financial advisor • fraud • Groupon • hedge fund • Huddleston • investment adviser • investment advisor • Investors Watchdog • Investor’s Watchdog • John A. Mattera • John Arnold • John Mattera • John R. Arnold • Lan Phan • pension fund • Ponzi • Praetorian Global Fund • Private Equity • QualifEye • RIA • scam • scheme • SEC • Securities and Exchange Commission • The Praetorian Global Fund • The Vigilant Investor • Winnow

SEC Finds Another Alleged Promissory Ponzi

On November 21, 2011, in New Hampshire, New Hampshire, Ponzi schemes, Promissory Notes, SEC, Scams, Securities Industry (general), The Vigilant Investor, by IW Dog

You can do a lot of good. Please get started.

Last week, I had the pleasure of appearing on Coach Ron Tunick’s Coaching Your Business radio show. Toward the end of the show, Coach Ron asked me what investors most need to watch out for these days. Regular readers of the blog can guess the answer. Promissory note scams. We’ve called them an epidemic. We’ve told you not to invest in anything that involves a promissory note unless you get a professional due diligence investigation. Yet, they continue to thrive. Last week, the SEC filed an enforcement action against another alleged promissory note scam: According to the SEC’s press release: (more…)

Tagged with: broker • Broker Snapshot • Constant Patrol • due diligence • endowment • financial adviser • financial advisor • fraud • hedge fund • Henry Roche • Huddleston • investment adviser • investment advisor • Investors Watchdog • Investor’s Watchdog • Masters Palace • Masters Palace Inc. • New Futures Trading International • New Futures Trading International Corporation • pension fund • Ponzi • Private Equity • QualifEye • RIA • scam • scheme • SEC • Securities and Exchange Commission • The Vigilant Investor • Third Realm • Third Realm Institute • Winnow

Creative Writing

On November 18, 2011, in New York, New York, Ponzi schemes, SEC, Scams, Securities Industry (general), The Vigilant Investor, by IW Dog

Fraud never slumps; it just changes its appearance.

Think about it from a financial scamsters’ point of view. You want money; lots of money. Your challenge is to come up with a reason why people should give it to you. If people think that you can turn their money into more money, that’s certainly reason enough. So you become a creative writer, constructing a story about a promising investment opportunity. How much does this fictional investment return? You decide. What’s it called? You pick a name. How are the profits generated? Make up something that sounds believable. Last week, the SEC commenced an enforcement case alleging that Tyrone L. Gilliams and his company TL Gilliams, LLC (“TLG”) stole $5 million from investors by engaging in that kind of creative writing. According to the SEC’s press release: (more…)

Tagged with: broker • Broker Snapshot • Constant Patrol • due diligence • endowment • financial adviser • financial advisor • fraud • hedge fund • Huddleston • investment adviser • investment advisor • Investors Watchdog • Investor’s Watchdog • pension fund • Ponzi • Private Equity • QualifEye • RIA • scam • scheme • SEC • Securities and Exchange Commission • T.L. Gilliams • The Vigilant Investor • TLG • Ty Gilliams • Tyrone L. Gilliams • Tyrone Williams • Winnow

False Due Diligence Promises

On November 15, 2011, in New York, New York, Ponzi schemes, SEC, Scams, Securities Industry (general), The Vigilant Investor, by IW Dog

Traditional due diligence methods have proven spectacularly ineffective at identifying fraud.

A case out of the U.S. Securities and Exchange Commission caught my eye because I’ve spent the last few months traveling the country training investors and investment advisers about effective due diligence techniques. The U.S. Securities and Exchange Commission has alleged that a New York hedge fund manager misstated the due diligence that it performed. According to the SEC’s press release: (more…)

Tagged with: Broker Snapshot • Capital Fund • Chetan Kapur • Constant Patrol • due diligence • endowment • financial adviser • financial advisor • fraud • hedge fund • Huddleston • investment adviser • investment advisor • Investors Watchdog • Investor’s Watchdog • Multi-Strategy Fund • pension fund • Ponzi • Private Equity • QualifEye • RIA • scam • scheme • SEC • Securities and Exchange Commission • The Vigilant Investor • ThinkStrategy • ThinkStrategy Capital • ThinkStrategy Capital Fund • ThinkStrategy Capital Management • ThinkStrategy Capital Management LLC • TS Multi-Strategy Fund • Winnow

UK Fraud a Veritable Scam Encyclopedia

On November 14, 2011, in Scams, Serious Fraud Office, The Vigilant Investor, United Kingdom, United Kingdom, by IW Dog

Investors who think that they’ve done a thorough due diligence investigation are left scratching their heads and wondering how they missed the fraud.

Investment fraud is not an American problem; it’s a world problem. While American frauds give us more than enough cases to discuss on this blog, there are even more cases overseas. Recent guilty pleas in the United Kingdom show that overseas scamsters are just as adaptable, prepared, and audacious as the American characters I describe in The Vigilant Investor. The next book might be about scams in other countries; I’ve certainly got enough material. According to Britain’s Serious Fraud Office: (more…)

Tagged with: Borge Andersen • broker • Broker Snapshot • Constant Patrol • David Horsfall • David McHugh • due diligence • Ed Davenport • Edward Davenport • endowment • financial adviser • financial advisor • Financial Services Authority • fraud • Gresham • Gresham Ltd. • hedge fund • Huddleston • Industrial Design and Finance • investment adviser • investment advisor • Investors Watchdog • Investor’s Watchdog • Louis Martin • pension fund • Pete Riley • Peter Riley • Private Equity • QualifEye • RIA • scam • scheme • Serious Fraud Office • Solicitor David Horsfall • The Vigilant Investor • Touchstone Accountants • Touchstone Accountants and Touchstone Law • Touchstone Law • Winnow

If I Can Trust Him With The Kids . . .

On November 11, 2011, in Colorado, Scams, The Vigilant Investor, by IW Dog

It’s what goes on behind that curtain that is most responsible for the billions in assets lost every year to investment fraud, by institutions and individuals alike.

I coached my sons’ baseball teams for ten years. We traveled all over the country and had a great time. Baseball introduced me and my family to people who have altered the course of our lives for the better. It was a huge blessing. So, a story about a Colorado softball coach caught my attention. According to the Dailycamera.com: (more…)

Tagged with: broker • Broker Snapshot • Constant Patrol • Dale Mott • Dick Mott • due diligence • endowment • financial adviser • financial advisor • fraud • hedge fund • Huddleston • investment adviser • investment advisor • Investors Watchdog • Investor’s Watchdog • pension fund • Ponzi • Private Equity • QualifEye • RIA • Rich Mott • Richard Dale Mott • Richard Mott • Rick Mott • scam • scheme • The Vigilant Investor • Winnow

Hyperbole

On November 10, 2011, in Ponzi schemes, Scams, Securities Industry (general), Texas, Texas, The Vigilant Investor, by IW Dog

If the experts are right, there are 200,000 sociopaths within fifty miles of where I live.

I sometimes I feel like the audiences at my speeches think that what I say is hyperbole. I tell them that there is a tsunami of investment fraud breaking over the investing world. I say that this storm might make us forget Bernie Madoff. I’d tone it down if I thought I was being over-the-top, but I don’t think that I am. I feel like the amateur astronomer who has discovered an earth-killing asteroid approaching and wants to warn everyone. A case out of Texas helps make the point. According to the Houston Business Journal: (more…)

Tagged with: broker • Broker Snapshot • Constant Patrol • Derek Walker • due diligence • endowment • financial adviser • financial advisor • fraud • hedge fund • Huddleston • investment adviser • investment advisor • Investors Watchdog • Investor’s Watchdog • Michael Derek Walker • Michael Walker • Mike Walker • Momentum Production • Momentum Production Corp. • pension fund • Ponzi • Private Equity • QualifEye • Renee Norris • RIA • Richard Plato • scam • scheme • Tammy Norris • Tammy Renee Norris • The Vigilant Investor • Winnow

Another Fraud Down Under

On November 9, 2011, in Australia, Australia, Scams, Securities Industry (general), The Vigilant Investor, by IW Dog

There are ways to protect yourself from characters like Brown and Forster.

A few months ago Medical Life magazine in Australia published my article on how doctors — frequent scam targets — can protect themselves from investment fraud. I appreciated the opportunity to spread the word about meaningful due diligence on the other side of the globe. Unfortunately, we are reporting today on a story about another fraud in Australia. According to Money Management: (more…)

Tagged with: Alan Brown • Alan Leslie Brown • BFS • Bridges Financial • Bridges Financial Services • broker • Broker Snapshot • Constant Patrol • due diligence • endowment • financial adviser • financial advisor • fraud • hedge fund • Huddleston • investment adviser • investment advisor • Investors Watchdog • Investor’s Watchdog • Leslie Brown • pension fund • Ponzi • Private Equity • QualifEye • RIA • scam • scheme • The Vigilant Investor • Winnow

The Left End of the Competency Curve

On November 8, 2011, in Florida, Florida, Green Energy, Louisiana, Louisiana, Ponzi schemes, SEC, Scams, Securities Industry (general), The Vigilant Investor, by IW Dog

I could fill another book with stories of scams in which licensed attorneys and CPAs were involved.

Investors often take comfort in knowing that the company they are investing in has a lawyer. The presence of counsel gives them confidence that the investment is legitimate. After all, would a member of the Bar risk his or her license by being involved with a scam? Unfortunately, the answer to that question depends upon where on the curve of attorney competency the lawyer falls. As in every other line of work, there are excellent attorneys, there are highly competent attorneys, and there are those on the far left of the curve who are either in over their heads or just plain incompetent. Last week, the SEC took action against one attorney who it would place on the far left of that curve. According to an article in Corporate Counsel: (more…)