SEC CHARGES NIKOLAI BATTOO OF BC CAPITAL GROUP WITH EXAGGERATING ASSET VALUES AND CONCEALING CLIENT LOSSES

The Securities and Exchange Commission (SEC) announced an emergency action against Nikolai Battoo, an asset manager with BC Capital Group who touted extraordinary investment success during the financial crisis while purportedly exaggerating the amount of assets he manages and concealing major investor losses. According to the SEC's investigations, Mr. Battoo claims to manage $1.5 billion for clients from around the world, including $100 million for clients in the United States. Despite Mr. Battoo's declared track record of extraordinary returns for his clients, he suffered losses in 2008 because of his investments in the Bernard Madoff Ponzi scheme and a derivative investment program that went sour.
A Ponzi scheme is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors or investors higher up the pyramid to pay an earlier investor's returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash. A derivative is a financial instrument whose value is based on one or more underlying assets. The most common underlying assets include commodities, stocks, bonds, and currencies. Derivatives function as a contract between two parties that specifies conditions such as the dates and resulting values of the underlying variables under which payments are to be made between the parties. The most common types of derivatives forms are forwards, futures, options, and swaps.
Mr. Battoo continued to overstate the value of his investments instead of admitting losses to investors. In fact, Mr. Battoo was able to attract new investors by simply claiming that he has been able to beat the benchmark. However, during recent months, Mr. Battoo's clients have demanded redemptions on their investments. Rather than pay his clients, Mr. Battoo has provided nothing but excuses ranging from the collapse of MF Global to a hold on his clients' money due to an ongoing government investigation.
Have you been unsuccessful in recovering money invested with Nikolai Battoo at BC Capital Group? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.
The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

SEC PURSUES EX-MONEY CONCEPTS FLORIDA BROKER "BUDDY" PERSAUD FOR PONZI SCHEME

Gurudeo "Buddy" Persaud, an ex-Money Concepts registered representative, is being charged by the Securities and Exchange Commission (SEC) for running a Florida based Ponzi scheme. An SEC investigation revealed that Mr. Persaud accumulated close to $1,000,000.00 from family and friends by promising them 6-18% returns with little to no risk. What his clients did not know was that Mr. Persaud's investment philosophy was based on the earth's gravitational forces and its effects on the valuation of stock prices. He also believed that the moon could influence investors to sell their stocks. In addition, Mr. Persaud hid his involvement in his own company, White Elephant Trading Co., by acting as an independent advisor that sold investments in White Elephant to his clients in contract form. The SEC is seeking to recoup Persaud's gains, obtain injunctive relief, and impose financial penalties against him.

A Ponzi scheme is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors or investors higher up the pyramid to pay an earlier investor's returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash. In Persaud's case, the SEC said that Persaud used investors' money to pay other investors while generating factitious account statements to conceal losses and maintain client confidence.

Selling away is the inappropriate practice of an investment professional who sells or solicits securities or investments not held or approved by the brokerage firm with which the professional is associated with. Under NASD and FINRA rules, brokerage firms must approve investments offered by their investment professionals and supervise its sales. Money Concepts can be held liable for Mr. Persaud's activities because it either failed to establish a reasonable supervisory system, or because it failed to implement an existing reasonable supervisory system. Even if Money Concepts did not know of Mr. Persaud's activities, it can still be liable to investors for damages.

Have you suffered investment losses in Buddy Persaud's Ponzi scheme? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

UNIVERSITIES NOT SPARED FROM PONZI SCHEME EPIDEMIC

A Texas based money manager has been charged with running a Ponzi scheme that defrauded the Houston Athletics Foundation, a University of Houston entity which funds athletic scholarships. David Salinas, who took his life after the Securities and Exchange Commission (SEC) filed a suit against him and his associate Brian Bjork, was charged with perpetrating a $39 million Ponzi scheme that involved over 100 investors, which included high-profile college coaches. A Ponzi scheme is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors or investors higher up the pyramid to pay an earlier investor's returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash. Around $2.2 million of the Foundations assets, having supposedly been invested in bonds, are still unaccounted for.

In Georgia, the SEC charged ex-University of Georgia football coach, Jim Donnan, for his involvement in a Ponzi scheme that defrauded close to 100 investors between August 2007 and October 2010. Mr. Donnan, a College Football Hall of Famer, and his business partner Gregory Crabtree, were charged with perpetrating an $80 million Ponzi scheme through GLC Limited. Investors were told that GLC was in the wholesale liquidation business or reselling damaged retail goods in bulk to discount retailers. Investors were offered short term investments ranging from 2 to 12 months and promised returns between 50 and 380%. It was later discovered that the only $12 million of investors' money was used to buy goods, but the goods ended up being dumped into warehouses in Ohio and West Virginia. The rest of the funds were used to pay returns to investors or were used by Mr. Donnan and Mr. Crabtree for other purposes.

Have you suffered investment losses in one of the above mentioned Texas Ponzi schemes? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

AXA ADVISORS FINED $100,000.00 FOR NOT FIRING BROKER WHO RAN A MISSOURI PONZI SCHEME

AXA Advisors has been fined $100,000.00 by the Financial Industry Regulatory Authority (FINRA) for not investigating and firing a broker who was running a Ponzi scheme, which dates back to 2001. Kenneth Neely began to work with AXA Advisors in Clayton, Missouri in 2007 before FINRA permanently barred him from the financial industry in 2009. Mr. Neely's Ponzi scheme defrauded investors out of $600,000.00 who for the most part belonged to a church and were led to believe they were investing in a real estate investment trust. Be that as it may, AXA was aware of Mr. Neely's fraudulent activity in 2008 when AXA conducted a yearly audit of him, which revealed a spreadsheet with investor payout information. Mr. Neely falsely claimed that the figures were for a client who wanted to start and budget a business. Mr. Neely eventually pled guilty to mail fraud and converting and commingling funds. Mr. Neely was fired by AXA Advisors in 2009.

A Ponzi scheme is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors or investors higher up the pyramid to pay an earlier investor's returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash. According to FINRA, Mr. Neely used his investors' money to pay earlier investors while generating sham invoices, which represented ownership certificates.

Selling away is the inappropriate practice of an investment professional that sells or solicits securities or investments not held or approved by the brokerage firm with which the professional is associated with. Under NASD and FINRA rules, brokerage firms must approve investments offered by their investment professionals and supervise its sales. AXA Advisors can be held liable for Mr. Neely's activities because it either failed to establish a reasonable supervisory system, or because it failed to implement an existing reasonable supervisory system. Even if AXA Advisors did not know of Mr. Neely's activities, it can still be liable to investors for damages for not investigating into Mr. Neely's computer records, lies, and questionable history.

Have you suffered investment losses in Kenneth Neely's Ponzi scheme? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

TEXAS PONZI SCHEMES: INVESTORS SUE MORGAN STANLEY SMITH BARNEY AND PROVIDENT ROYALTIES

11 investors in Dallas, Texas are suing Morgan Stanley Smith Barney and one of its financial advisers, Delsa Thomas, for running a Ponzi scheme. A Ponzi scheme is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors or investors higher up the pyramid to pay an earlier investor's returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash. The investors alleged that Ms. Thomas took advantage of their trust by suggesting that they invest in Tejas Eagle Financial LLC; Ms. Thomas established an investment range of $125,000.00 to $250,000.00, which was made up of her investors' retirement and savings money. Investors also contended that Ms. Thomas' recommendation was unsuitable and was bound to destroy whatever amount they had invested and that Morgan Stanley Smith Barney breached its duty of care by allowing her to give investment advice that was unsuitable. Damages are being sought under vicarious liability, fraud, negligent misrepresentation, and negligent supervision.

On another note, a federal court in Texas has sentenced Joseph Blimine to 20 years for running two oil and gas Ponzi schemes that began in Michigan in 2003. Mr. Blimine and other fraudsters made over $28 million before starting Provident Royalties in 2006 for the purpose of carrying on with their Ponzi scheme in Texas; close to 7,700 investors were defrauded out of over $400 million. Mr. Blimine pled guilty to the criminal charges brought against him by the Securities and Exchange Commission following a lawsuit against Provident Royalties, Provident Asset Management, and 21 other entities that offered and sold the investment.

Due diligence requires a reasonable investigation of all material facts before entering into an agreement or transaction with another person or entity. It is a measure taken to prevent unnecessary harm to an innocent party. The measure would require an entity offering and selling a security to analyze the legitimacy, nature, and risks associated with the product. An investor in Provident Royalties can claim damages against the entity that sold the investment for not performing its due diligence prior to the offer and sale.

Have you suffered investment losses in the Delsa Thomas or Provident Royalties Ponzi scheme? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

FLORIDA TD BANK AIDED AND ABETTED ROTHSTEIN IN PONZI SCHEME

A jury has awarded Texas-based Coquina Investments $67 million against TD bank for its involvement in Scott Rothstein's $1.2 Billion Ponzi scheme. Scott Rothstein, the once-high flying South Florida attorney, pleaded guilty in 2010 for defrauding investors out of $1.2 Billion from 2005 to 2009. Mr. Rothstein told investors that they were purchasing interests in settlements involving sexual and employment discrimination, which was later discovered to be a sham. Coquina alleged that TD Bank officers assisted Mr. Rothstein by meeting with victims and telling them that the business was legitimate and that the scam could not have worked without TD Bank's assistance.

A Ponzi scheme is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors or investors higher up the pyramid to pay an earlier investor's returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash. In Mr. Rothstein's case, earlier investors were issued returns with money accumulated from new investors. TD bank provided Mr. Rothstein with documents to disguise the scheme and bring in new investors, keep investors involved, and get investors to reinvest.

An investor can claim damages against an entity charged with aiding and abetting a crime. An agent of the charged entity does not have to be present when the crime was being committed, but he or she knows of the crime before or after the fact, and may assist in the crime's completion through advice, actions, or financial support. TD Bank may be liable to investors for aiding and abetting due to its involvement in the Scott Rothstein Ponzi scheme.

Have you suffered investment losses due to TD Bank's involvement in Scott Rothstein's Ponzi scheme? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.

SEC CHARGES JASON J. KONIOR AND THE ABSOLUTE FUNDS OVER ALLEGED $11M PONZI SCHEME

The Securities and Exchange Commission has filed charges against fund manager Jason J. Konior and his Absolute Fund Management and Absolute Fund Advisors for running a Ponzi-like investment scheme that was supposed to maximize investors' profits and instead allegedly funneled $2 million of clients' money to pay for earlier investors' redemption requests, as well as business and personal expenses. The SEC is charging Konior and his two firms with violating the Securities Exchange Act of 1934's antifraud provisions. The Commission is seeking financial penalties, permanent injunctive relief, and disgorgement of ill-gotten gains.

According to the SEC, beginning at least last November, Konior and the two firms raised about $11 million from investors by selling them Absolute Fund LP limited partnership interests. Konior allegedly touted this investment vehicle as having $220 million in trading capital. He and his two companies also allegedly made false claims that the fund would contribute millions of dollars as a promised match to clients' investments (Konior had told investors that Absolute would put in up to nine times what they originally contributed), combine new investors' money with its principal, and put their cash in brokerage accounts that investors could use to trade securities through. This "first loss" trading program was supposed to allow investors to significantly up their potential profits.

Per Absolute Fund Advisors' marketing collateral, Absolute would give seed capital allocations to emerging and new hedge funds, which would then buy limited partnership interests in the fund. Absolute was supposed to match the investments by an up to 9:1 ratio. This means that if a hedge fund invested $1 million in Absolute then the fund would match it with $9 million, which means there would be $10 million in investment capital.

Absolute was to put this mix of funds in a brokerage firm sub-account to be managed by the hedge fund investor. Per the "first loss model" trading losses in the sub-account would be 100% allocated to the hedge fund investor up to the sum of its capital contribution. The hedge fund investor was then supposed to get 50-70% of trading profits.

Unfortunately, this trading program that was promised never went into operation. The investment fund not only neglected to match investors' funds but also failed to return their money when they asked to withdraw their investments.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Mr. Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. Our law firm is devoted to protecting investors' rights nationwide! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at pearce@rwpearce.com for answers to any of your questions about this blog post and/or any related matter.