Thursday, 31 July 2014
Last updated 1 hour ago
Apr 26 2011 | 12:44pm ET
These days, it's hard to set records in hedge fund fraud. But a Beverly Hills, Calif., firm may have done just that—as the shortest-lived and least-lucrative alleged scam in history.
The Securities and Exchange Commission yesterday won an emergency order shutting down IU Group after the regulator said it found "flagrant misrepresentations" on the part of the firm to potential investors. Luckily for those potential investors, the SEC said it appears to have stopped IU before any of them became actual victims; the agency said it has not uncovered any evidence of either investors or investments at the firm, headed by Elijah Bang and Daniel Lee.
That didn't stop the two men from claiming a four-year successful track record for a firm allegedly started last year, nor from claiming more than $800 million in assets under management, the SEC said. Bang and Elijah, who in 2009 were ordered by California authorities to stop their allegedly illegal and fraudulent sales of securities, also allegedly claimed that most of their investors were professional athletes, actors, producers, doctors, professors, politicians and corporate executives.
The pitch that got them shut down was more modest, seeking investors among retirees, professors and Christians. On several Web sites flogging their allegedly non-existent wares, Bang and Lee claimed to be "devoted Christians who believe in God, Jesus Christ and the Holy Spirit."
In addition to the emergency order, the SEC has also filed civil charges against the two men. Both may also face criminal charges in California.
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…