Wednesday, 29 June 2016
Last updated 1 hour ago
Jan 21 2009 | 2:58am ET
Another day, another Ponzi scheme: The Securities and Exchange Commission yesterday sued a Texas man for allegedly defrauding investors of at least $8.5 million.
According to the SEC, Rod Stringer raised the money for his phony RCS Hedge Fund. But just $1.5 million of the money collected was actually deposited in Stringer’s account. The agency alleges in their complaint, filed in federal court in Lubbock, Texas, that Stringer used $2.4 million to pay off other investors and the rest to buy himself the finer things in life, including fancy cars, a boat, a horse-racing partnership and an office swimming pool.
Stringer, of Lamesa, Texas, allegedly told investors that the fund, which he said had $45 million in assets from 31 investors, had enjoyed phenomenal returns: Annual gains as high as 61% and total returns of more than 600%. Contrary to those grandiose claims, the SEC and Federal Bureau of Investigation say what little investing he did was a disaster, resulting in substantial losses.
The SEC has asked the court to restrain Stringer from securities law violations. It is seeking repayment of the missing money with interest, as well as civil penalties.