Wednesday, 30 July 2014
Last updated 8 hours ago
Jun 29 2010 | 9:00am ET
The Securities and Exchange Commission yesterday announced fraud charges against a purported fund manager based in the U.S. Virgin Islands who allegedly perpetrated a $105 million Ponzi scheme.
The SEC alleges that Daniel Spitzer used several entities and sales agents to misrepresent to investors that their money would be invested in forex-focused investment funds. Investors were told that Spitzer’s funds had never lost money and historically produced profitable annual returns that one year reached over 180%.
Spitzer instead used money raised from new investors to pay earlier investors, and misappropriated investor funds to pay unrelated business expenses. The SEC alleges that he led an extravagant lifestyle, spending more than $900,000 at a Las Vegas casino. He concealed his scheme by issuing phony documents to investors that led them to believe their investments were profiting.
The SEC has obtained an emergency court order freezing the assets of Spitzer and his companies.
According to the SEC’s complaint, filed in U.S. District Court for the Northern District of Illinois, Spitzer conducted his fraudulent scheme, which involved 400 investors, from at least 2004 to present. He only invested approximately $30 million of the more than $105 million he raised from investors.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…