Thursday, 31 July 2014
Last updated 6 hours ago
Apr 17 2012 | 12:31pm ET
The Securities and Exchange Commission has put an end to what it calls a hedge fund Ponzi scheme targeting Persian Jews in California.
The regulator on Friday won an emergency order pulling the plug on Neman Financial. Shervin Neman allegedly raised more than $7.5 million for that "hedge fund," but spent the money either on himself or on Ponzi-style payments to earlier investors.
"Neman deceived members of his own community to raise money in this fraudulent Ponzi scheme," Michele Wein Layne of the SEC's Los Angeles office said. "By exploiting investors' trust in him, Neman was continually able to raise more money to pay back existing investors and finance an extravagant lifestyle."
According to the SEC, Neman spent almost $1.6 million of investors' money on the latter, including to pay for jewelry, cars, tickets to sports games, vacations, his wedding and his honeymoon. In total, more than 99% of the money raised went towards those expenses or the Ponzi payments, the complaint alleges.
It wasn't supposed to be this way: Neman told his investors, at least 11, all members of the Persian-Jewish community in L.A., that Neman Financial invested in foreclosed residential properties and on private investments in hot pre-initial public offering companies, including Facebook, Groupon, LinkedIn and Angie's List.
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…