Yearly Archives: 2012
Former LPL Broker Sentenced to More Than 3 Years in Prison for Fraud
Elliot Kravitz (“Kravitz”), a former broker for LPL Financial (“LPL”) in Ohio, was sentenced to 41 months in prison and ordered to pay $1.8 million in restitution to clients. Kravitz pleaded guilty to wire fraud last year. According to prosecutors, Kravitz wired funds from the accounts of at least 9 of his clients into… Read More »
Stanford Convicted in $7 Billion Investment Fraud
Robert Allen Stanford (“Stanford”), founder of Stanford Financial Group and former Chairman of the Board of Antigua-based Stanford International Bank (“SIB”), was convicted by a Houston federal jury for orchestrating a $7 billion investment fraud involving bogus certificates of deposit issued by SIB. The jury found him guilty of 13 out of 14 counts… Read More »
Founder of Defunct Firm Brookstreet Securities Hit With $10 Million Fine
Stanley Brooks (“Brooks”), founder of defunct brokerage firm Brookstreet Securities (“Brookstreet”), was assessed a penalty of $10 million for securities violations in connection with the sale of collateralized mortgage obligations (“CMOs”) from 2004 to 2007. The penalty is believed to be one of the largest assessed against an individual for activities related to the… Read More »
Odyssey Healthcare Settles Whistleblower Suit For $25 Million
The Department of Justice announced that Odyssey Healthcare (“Odyssey”), a subsidiary of Gentiva Health Services, Inc., has agreed to settle a whistleblower lawsuit for $25 million. Odyssey is a provider of hospice services in 27 states. The settlement resolves claims in three whistleblower lawsuits filed under the qui tam provisions of the False Claims… Read More »
Former President of Real Estate Trade Group Pleads Guilty to Investment Fraud
Renee Marie Brown, former president of the Real Estate Investment Securities Association (“REISA”), pleaded guilty to defrauding investors out of $1.1 million. Ms. Brown, a former investment adviser, was also a founder of FactRight, LLC, a consulting firm that conducts due diligence on private placements and real estate deals. In April 2010, the Securities… Read More »
U.S. Intervenes in American Commercial College, Inc. Qui Tam Action
The United States has intervened in a qui tam action filed against American Commercial College Inc. (“ACC”), a chain of for-profit colleges located in west Texas. The action was filed under the qui tam provision of the False Claims Act by whistleblowers Shawn Clark and Anthony Delgado, former ACC employees. The whistleblowers’ complaint alleges… Read More »
SEC Issues Risk Alert to Firms About Unauthorized Trading
The Securities and Exchange Commission (“SEC”) has issued an alert to broker-dealers and investment advisers to be more vigilant regarding the detection and prevention of unauthorized trading in customer accounts. Unauthorized trading is not limited to unapproved trades executed in customer accounts, it can also include trades that exceed firm limits on position exposures,… Read More »
Court of Appeals Reinstates Whistleblower Action Against Medco Health
The 11th U.S. Circuit Court of Appeals has reinstated a qui tam action filed against Medco Health Solutions (“Medco”) and its subsidiaries by whistleblowers Lucas Matheny and Deborah Loveland. The qui tam complaint had previously been dismissed by the U.S. District Court for the Southern District of Florida for failure to state a claim…. Read More »
Stockbroker Charged With Fraud For Selling Med Cap Notes
Authorities in Colorado have criminally charged a former stockbroker, John Brady Guyette, with 9 counts of securities fraud in connection with his sale of Medical Capital notes. Medical Capital Holdings, Inc. (“Med Cap”), an alleged Ponzi scheme, raised approximately $2.2 billion from investors between 2003 and 2008. It is believed to be the first… Read More »
Warning: Fraudsters Posing As SEC Employees
The Securities and Exchange Commission (“SEC”) recently issued an Investor Alert warning investors about fraudsters impersonating SEC employees. The SEC says it has been flooded with complaints about individuals, claiming to be SEC employees, calling or emailing unsuspecting investors with offers of large sums of money (such as $450,000), if the investor deposits a… Read More »