Friday, December 9, 2011

SEC Halts Prime Bank Scheme by Washington DC Law Firm and Pennsylvania Company

The SEC announced that it has filed charges and obtained an emergency court order to halt a prime bank scheme in which the perpetrators stole investor funds to purchase luxury cars, take a trip to the Bahamas, and pay the bills of a Washington D.C. law firm. The two individuals being charged are a Pennsylvania resident and a Washington D.C. attorney who defrauded at least 13 investors out of more than $2 million since August 2010.

The SEC alleges that they offered investors risk-free returns of up to 20 times the original investment within as few as 45 days through the purported “lease” and “trading” of foreign bank instruments in highly complex transactions involving unidentified parties and secretive “trading platforms.” Yet all the bank instruments and trading programs were entirely fictitious. Investors in schemes like this are often told that details are too difficult for non-experts to understand, and that secrecy is required for success. In this case, they used vague and complex terms to confuse investors, and claimed that confidentiality concerns prevented them from providing more details regarding the status of the investment. The D.C. attorney and her law firm acted as counsel for the Pennsylvania resident.


SEC Halts Prime Bank Scheme by Washington DC Law Firm and Pennsylvania Company
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