SEC Halts $25M Futures Trading Fraud

May 5 2008 | 11:39am ET

The Securities and Exchange Commission has sued Laguna Hills, Calif.-based Safevest and its principals for allegedly running a Ponzi scheme and misappropriating investor funds.

The U.S. District Court Judge for the Central District of California has also issued an order freezing assets and appointing a temporary receiver over Safevest and its affiliates.

Since last May, Safevest allegedly raised some $25 million from more than 500 investors to invest in futures commodities trading, according to the SEC. Unwary investors were told that the fund would generate daily profits ranging from 1.5% to 1.9%, and that they could receive their money back within 72 hours of requesting it.

In reality, no money was invested in futures, and requests by investors for withdrawal of their funds have either not been honored or have only been partially honored, according to the SEC. The SEC further alleges that the firm paid more than $18 million to investors in Ponzi-like fashion as well as misappropriating investor funds for the personal use of Ervin, Slye, and their family members.

In its lawsuit, the SEC is seeking preliminary and permanent injunctions, disgorgement, and civil penalties against Safevest and principals Jon Ervin and John Slye. A hearing on whether a preliminary injunction should be issued against the defendants and whether a permanent receiver should be appointed is scheduled for May 12.


In Depth

Whisky Business: The Ultimate Liquid Alternative Investment

Sep 15 2014 | 7:02am ET

David Robertson knows his single-malt whisky—he was the Master Distiller at the...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

In search of the ‘new normal’ at the Fed

The Federal Reserve keeps baby-stepping toward a “normalization” of monetary policy. But just what is normal?

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.