Category: Fraud

Compliance Lessons From Star Wars – Lies

With the pending release of Episode VIII – The Last Jedi, I’m joining Tom Fox in tying compliance and the Star Wars franchise together in posts this week. I’ve always been trouble by the lie from Obi Wan Kenobi to Luke Skywalker: “Darth Vader betrayed and murdered your father.” It’s the little lies that lead to bigger lies

Yet Another ICO Scam

With Bitcoin hitting stratospheric pricing levels, there are scams aplenty trying to cash in on tulip-mania around Bitcoin. This chart from the Wall Street Journal says it all. Of those trying to cash in, I’m sure some actually have legitimate business purposes and are trying to find new ways to operate financial systems. But many

The Pot of Gold at the End of the Rainbow

With all of the SEC enforcement actions, it takes something related to my area or a quirk to catch my attention. The fraud that caught my attention this morning was a hedge fund manager claiming he no longer needed income and instead wanted to help friends and charitable causes. He told investors that his 20%

The One with the Deceptive Investment Description

Augustine Capital Management did many things wrong while managing its Augustine Fund. One highlight or the misdeeds is using fund assets to make conflicting transactions without notifying investors. The fund charged the salaries of two principals, Thomas F. Duszynski and John T. Porter, as fund operating expenses. According to the fund documents, the management fee was supposed

Hoodoo Spells Fails to Ward Off the Feds

According to the SEC Complaint and Criminal Complaint, Dawn Bennett lived the life a classic ponzi schemer who got in over her head and continued to lie and cheat, perhaps hoping to find a way out. The story caught my attention for two reasons. The first was the implication that Ms. Bennett used a voodoo

The One With A Cascade of Bad Choices

Rusty Tweed may have been trying to make good investments for his clients. He knew a guy that had a new quantitative trading strategy for blue chip stocks. Rusty raised money form his clients to invest with the quant manager. Problems started right at the beginning, according the complaints filed by FINRA and the Securities

The First Every Cryptocurrency Back By Real Estate

The First Every Cryptocurrency Back By Real Estate, REcoin, is a big scam. At least according to the Securities and Exchange Commission. Several weeks ago the SEC posted an Investor Bulletin in Initial Coin Offerings. In the bulletin, the SEC raised the issue that an initial coin offering could easily be considered an offering of

By No One’s Math Is 50 Percent a Vast Majority

There is no place for hyperbole or fudging numbers in disclosure of investment returns. The Boston office of the Securities and Exchange Commission made that point with Aegerion Pharmaceuticals in its enforcement case. According to the SEC complaint, Aegerion’s CEO said that the “vast majority of patients” who were given prescriptions for one of its drugs were

The One with The Fake Ron Stenson

Some of the things that catches my attention with frauds and Ponzi schemes are the steps that the fraudsters will take to cover up the fraud and how they think they will escape from the fraud unscathed. The recent charges against Jeremy Drake caught my attention because of the steps he took. The Securities and Exchange

The One With The Fake Cancer Detection

The product sounds great: “The Gold Standard to monitor metastic breast cancer. Our Serum-2 test provides a more accurate representation of HER-2 status, facilitating more appropriate treatment strategies.” NanoMolecularDX is “executing a commercialization strategy” for this test and others.  In July is closed on $1 million of seed funding. I’m an advocate for cancer research and