Based on the major papers and business journals, California readers might be inclined to think that investor fraud tends to occur mainly at the highest levels of the industry. That would be a mistake.
The truth is that he securities pool is a big one, filled with fish big and small. Breaches of duty that result in painful investor losses can and do occur, no matter at what depth one happens to be wading. Recovery is possible in many instances, with the help of experienced legal counsel. This comes to mind in light of a couple of recent stories that made the news.
On the one hand, there is the elephant story in the room. As reported by The Wall Street Journal late last month, the Securities and Exchange Commission leveled charges against operators of a San Diego-based capital management firm.
Two officials of the company are named in the case. The firm's founder is accused of cherry picking trades, diverting the best ones to himself and members of his family, and costing other of his clients nearly $11 million. The executive and a portfolio manager are also alleged to have diverted some $1 million that should have been used for market research for personal use.
A decision on possible penalties is pending in that case.
Meanwhile, a former volunteer basketball coach from the San Diego area has been brought up on charges that he and two associates scammed a number of investors out of thousands of dollars. The allegation is that dating back to 2008, the 42-year-old man and the others promised investors a guaranteed return and a risk-free investment involving an international bill of exchange. It's not clear how much money investors lost, but the man's attorney says it was a lot.
The man pleaded not guilty to the charges in federal court last week, but his attorney suggests that will change. He says his client is a foreign national who wants to avoid deportation and is willing to do all he can to make restitution to those who lost money.
The point to take away is that wrongdoing at any level deserves to be met with a vigorous response for the benefit of those who are victims. Contacting an attorney is always advised.
Source: CBS8.com, "Former coach accused of running a game on investors," Phil Blauer, Aug. 30, 2013