Stock Fraud Scheme Stole Registered Firm’s Corporate Identity

A federal court issued a default judgment against a firm that stole an investment adviser’s corporate identity in order to engage in a fraudulent stock offering. According to the SEC, the defendant made several fraudulent representations as part of a sham offering including that the defendant was affiliated with a similarly-named legitimate registered investment adviser and that the defendant managed funds on behalf of the registered adviser. The defendant also promised outsized returns.

OUR TAKE: As if registered investment advisers don’t have enough concerns, now they must worry about some fraudster misusing their name and reputation.

http://www.sec.gov/litigation/litreleases/2009/lr21254.htm