On February 7, 2019, the Securities and Exchange Commission (SEC) charged the owner of an online gaming company, Kizzang LLC, with fraudulently raising  $9 million from 50 individuals.

The SEC alleged that Robert Alexander represented  that investors would be returned 10 times capital invested and that Alexander had his own millions at stake in Kizzang, had made a $50 million charitable donation, and that he was the creator of a significant video game.

History repeats itself.

In the booming 1920s, before regulation imposed by the New Deal, scamsters would literally form public corporations, go public and sell shares, based on fictitious businesses. Stock manipulators like Joe Kennedy would reap fortunes at a clip by selling shares after the public securities price of the shares was run up.. There were “pools” in which investors conspired to perpetrate this kind of fraud. A notable scam of the 1920s was the “Radio Pool,” in which crooked Wall Streeters would drive up RCA (the leading stock of the booming 1920s) stock, unload their shares for huge profits, then leave unwary investors with collapsed prices for RCA.

Now, even after 85 years of regulation by the SEC, it happened again.

Sea of Thieves Review - A Dip in the Shallow End ...We are investigating FINRA complaints against Victor Rigoni (CRD#4272056) for sale of unsuitable investments

According to FINRA’s Broker Check some customer complaints concern private Real Estate Investment Trusts and other non traditional products like oil and gas investments.

The recent claim against Rigoni is dated October 2018. The customer FINRA complaint states damages of $125,000 and is before FINRA for determination. Recovery is sought for funds lost in unsuitable investments among other claims.

Former Senior Attorney at Apple Attorney Caught Insider Trading

On February 14, 2019 insider trading charges were advance against the Apple lawyer responsible for supervising insider trading at that company.    The charges were brought by the SEC.

As alleged, in house compliance attorney,  Gene Daniel Levoff (who formerly acted as Apple’s global head of corporate law and corporate secretary), was privy to insider information as to Apple’s quarterly earnings announcements. Levoff had a prime position who regularly reviewed Apple’s numbers prior to public release.

Charles Ponzi hard at work above.

Scammers nailed for $1 billion in fines in Ponzi Ripoff

A Federal Court in Florida on January 24, 2019 ordered The Woodbridge Group of Companies LLC and its disgraced CEO Robert H. Shapiro to pay $1 billion in disgorgement and penalties.

Three penny-stock companies and their CEO – Cherubim Interests, Inc. (CHIT), PDX Partners, Inc. (PDXP), Victura Construction Group, Inc. (VICT), and Patrick Jevon Johnson  were the subject of an SEC action to enforce  subpoenas this week. SEC v. v. Cherubim Interests, Inc., PDX Partners, Inc., Victura Construction Group, Inc., and Patrick Jevon Johnson, No. 2:18-mc-00175 (C.D. Cal. filed December 21, 2018)

According to the SEC’s application as described in Litigation Release 24380 dated 26 December 2018,  on December 21, 2018 The SEC announced it sought enforcement of its subpoenas in the   U.S. District Court for the Central District of California.

The subject of the investigation is to determine whether individuals or entities engaged in a potential pump-and-dump scheme. The securities implicated were CHIT, PDXP, and VICT.

The Associated Press reported a binary options scam involving 4 Israeli women. The scam was multimillion-dollars in amplitude which resulted in Federal charges in Maryland against four women who worked for Israeli company. The FBI affidavit stated that over $99 million may have been scammed in one year alone.

The scam, of course, commenced with a sales pitch and script: You will succeed in “95% of your trades” if you hand over your money. According to an FBI Affidavit, the saleswomen stated: “If you win, I win.”

The Binary Options scam, of course, was securities fraud under Section 10 of the Securities Exchange Act of 1934.http://www.BrokerFraud.Net

In a release from the U.S. Attorney’s Office in New York, a New York Real Estate Developer Michael D’Alessio pled guilty in a federal court to master minding a real estate fraud involving luxury developments, The projects were located variously in Manhattan, Westchester and the Hamptons. The Developer then lied on Federal Bankruptcy filings.

$58 Million was collected in the Ponzi. The Ponzi involved the sale of interests in Limited Liability Companies, supposedly involved in real estate development, to victim investors. A Ponzi scheme is a plan to collect moneys from unsuspecting investors, stealing a portion of the funds, then returning alleged high rates of return to earlier investors using the funds from later investors. Investors are almost always promised a fictitious above market rate of return. The most recent “huge” Ponzi was the Bernard L. Madoff Securities LLC Ponzi.http://www.BrokerFraud.Net. That one involved a gross amount of $65 Billion, but with approximately $20 billion of initial investors funds being involved.

The Release and related court documents stated that D’Alessio served as the president of a real estate development firm involved with residential and commercial projects.

The Financial Institutions Regulatory Authority (FINRA) has ejected broker Mark Kaplan from the securities industry. Kaplan was found to have churned the account of a 93 year old client.

According to the Letter of Acceptance, Waiver and Consent agreed to by Kaplan, the 93 year old was stricken with dementia.

The churning occurred over  4 years. $723,000 in trading losses occurred. Kaplan reportedly generated a like amount of commissions and mark ups for himself and his employer, Vanderbilt Securities.

On December 19, 2018, the SEC announced additional charges against an additional 13 individuals and 10 companies for unlawfully selling securities of Woodbridge Group of Companies LLC to retail investors.

Woodbridge collapsed into bankruptcy in December 2017. The SEC previously  charged the owner, the company and others of operating a $1.2 billion Ponzi scheme. Top sales agents were also accused.

The supplemental defendants, all 13, of selling more than $350 million of unregistered securities to about 4,400 investors. The defendants told the purchasers that the Notes were “safe” Investments.

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