The Ponz is everywhere! Seriously, was anyone doing any real investing over the past several years? John M. Donnelly of Charlottesville, Virginia, was arrested earlier this week and “indicted for fraudulently taking at least $11 million from as many as 31 investors in an alleged Ponzi scheme,” says their local paper the Hook. He was promising investors returns of up to 22% annually, but naturally had failed to make any investments with his clients’ money since 2002. One anonymous person—who may or may not have been a client, we don’t know—told the paper, “I visited his office once. He had a bunch of computers. It seemed like a very sophisticated operation.”
The SEC has busted another Ponzi scheme and ordered its operators to “disgorge their ill-gotten gains.” In this one, Anthony Vassallo of “Equity Investment Management and Trading” recruited investors through his church by saying he had a computer program that would guarantee a 3.5% return on stocks. Eventually he stopped trading and paid off investors using other investor’s money, while shoveling the rest of the funds into other schemes and scams. Vassallo was eventually busted when his investors ganged up on him and said his reports were phony-baloney.
Well, it’s official. Bernie Madoff has plead guilty to 11 counts of fraud, money laundering, perjury and theft. The maximum amount of prison time for these crimes is 150 years.
More information about the Stanford International Bank fraud case, including, but not limited to: a bank panic in Venezuela, hugs from Nancy Pelosi, allegations of money laundering for drug cartels, and predictable vows to “fight with every breath to continue to uphold our good name and continue the legacy we have built together.” Still no word on where the $8 billion went. [Forbes]
The SEC has charged Robert Allen Stanford, a prominent Texas businessman, in connection with an $8 billion fraud in the sale of so-called certificates of deposit that promised unrealistic rates of return. Stanford guaranteed fixed-income investments by “promising improbable and unsubstantiated high interest rates,” according to a statement by the SEC.
A court filing in U.S. Bankruptcy Court in Manhattan made public a 162-page document listing his various clients, which include Hall of Fame Pitcher Sandy Koufax, actor Kevin Bacon, and the Wilpon family, owners of the New York Mets.
The SEC has temporarily banned short selling of 799 financial stocks, and the Treasury Department has said that it would guarantee (temporarily?) money market funds up to the amount of $50 billion. The New York Times called this move “startling” because money market funds have long been considered one of the safest investments — about as safe as a savings account.
Bank of America will pay a nearly $10 million settlement to 15,000 customers after feeding investors information that was biased towards its own funds, says the SEC. [CNNMoney]
The FBI has opened an investigation into Countrywide for suspected securities fraud, reports the New York Times. The Justice Department and FBI “are looking at whether officials at Countrywide, the nation’s largest mortgage lender, misrepresented its financial condition and the soundness of its loans in security filings.” So far everything is unofficial because nobody has been authorized to discuss the case, and a Countrywide spokeswoman says, “”We are not aware of any such investigation.”
The SEC doesn’t like stock spam. They’ve suspended trading in three companies as part of an anti-spam initiative, meant to deter e-mail campaigns that defraud investors.
David DeSmitdt’s retirement plan with J.P. Morgan got hacked and emptied, and there’s no federal laws to protect him.
We reported last week that the SEC has subpoenaed Overstock.com. And we all already know that Overstock CEO Patrick Byrne is out of his flipping mind. Put those two facts together? This amazing press release straight from Overstock.com, titled (we swear to god!) “Overstock.com Celebrates Receipt of SEC Subpoena.”
Overstock.com is an embattled victim under attack by its rivals and a cabal of journalists and shortsellers working to destroy its good name.
s enforcement division for subpoenaing two journalists, declaring their behavior renegade.
We know Overstock.com sometimes has crappy customer service, as we amusingly revealed.