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Recent SEC Enforcement Actions Highlight Broad Range of Risks for Investors

March 31, 2021 Blog

Investors face no shortage of risks in today’s marketplace. While investing inherently involves risk, investors should not have to worry about losing their money to fraud. Unfortunately, this is a very real concern, and countless investors suffer fraudulent losses each year.

The U.S. Securities and Exchange Commission (SEC) has recently initiated enforcement actions highlighting the broad range of fraud-related risks facing individual investors. Here is an overview from Zamansky LLC, a securities litigation law firm serving investors nationwide:

1. California Resident Charged with Selling Purported “Insider Tips” on the Dark Web

The SEC charged a California resident with selling purported “insider tips” on the dark web. According to the SEC, the individual “offered and sold . . . various purported ‘insider tips’ that he falsely described as material, nonpublic information from . . . corporate insiders.” The individual is accused of collecting payment from other dark web users who subsequently made trades based on the information he provided.

2. Colorado Resident Charged with Promoting “Sham” Bottling Company

The SEC charged a Colorado resident with raising $3.2 million from investors by fraudulently promoting a “sham” bottling company. The SEC alleges that the individual told investors that the company, GO ECO, bottled “the number one protein shot beverage in the world,” and that the company was expecting to generate annual returns of 20 to 25 percent. “In fact,” the SEC says, “GO ECO never manufactured or bottled any beverages, never opened a bank account, and never operated in any way at all.”

3. New Jersey Resident Charged with Perpetrating Real Estate Fraud Scheme

The SEC charged a New Jersey resident with perpetrating a real estate fraud scheme that targeted mostly members of the Orthodox Jewish community. The individual allegedly solicited millions of dollars from investors through the sale of membership interests in a limited liability company (LLC) that owned apartment complexes.

According to the SEC, the individual covered up information about the LLC’s financial problems and its inability to pay investors returns. Among a long list of other fraudulent acts, the SEC alleges that the individual also, “provided investors with documents reflecting false and inaccurate information concerning the profitability of the apartment complexes; sold overlapping ownership interests to investors using false operating agreements and, at times, forged signatures; frequently commingled investor funds to prop up real estate holdings that were struggling; and paid investors with fake profits generated by [a] mortgage fraud [scheme].”

4. Unregistered Investment Advisor Charged with Defrauding Investors

The SEC charged an unregistered investment advisor in South Carolina with forming two private hedge funds in order to conceal “massive losses”. The SEC alleges that over a period of 10 years, the advisor made numerous false statements to his customers and made “Ponzi-like payments” in order to perpetrate the multi-million-dollar fraud.  

5. AT&T Charged with Selectively Disclosing Material Information

The SEC charged AT&T and three company executives with selectively disclosing material nonpublic information. According to the SEC, after learning that the company would face unexpected losses due to unfavorable smartphone sales, the executives make private phone calls to select analysis while withholding this information from the public.

Contact Zamansky LLC | A Securities Litigation Law Firm

Do you have concerns about investment fraud? If so, you should speak with a lawyer promptly. Call 212-742-1414 or contact us online to speak with a securities litigation lawyer at Zamansky LLC today.