News and Commentary on Those Being Regulated, Financially.
During the dot.com boom, investors routinely bought shares of companies that had no business experience, assets, or revenue. But how about a company with no employees, office space, customers or products? Would it help if I told you it was a “green energy” company? It turns out that this company, Green Energy Live, Inc., was a very bad investment. And this is why its promoter, Nicholas Louis Geranio, finds himself being financially regulated this week. [Read more...]
One wonders whether (former) foreign currency trader Alexandre P. Guimaraes felt a touch of relief yesterday, despite being ordered to pay $850,000 by the U.S. Commodity Futures Trading Commission. How exhausting it must have been to keep the plates spinning after sending out “hundreds of false monthly account statements” to twenty-nine forex customers reflecting fictitious profits every month. Of the $465,000 Guimaraes solicited from customers, he squandered 92% on bad forex trades and generous personal withdrawals for “international travel” and “jewelry.” [Read more...]
Accounts receivable
Koss Corporation has had a horrendous couple of years: a $30 million accounting embezzlement; its former Principal Accounting Officer sentenced to 11 years; and a related SEC Complaint in October alleging that the Company prepared materially inaccurate financial statements and lacked adequate internal accounting controls.
Things brightened a bit when Koss, and its co-defendant, CEO Michael Koss, agreed to settle with the SEC. They filed the settlement with federal Judge Randa in Wisconsin, no doubt hoping for swift court approval so the Company can get on with the business of selling headphones. That didn’t happen. [Read more...]
Pastor Gilliams, Commodities Trader
Cincinnati businessman David Parlin was supposed to be invested in Treasury STRIPS. Instead he was stripped of $4 million — and most of his dignity — by Philadelphia Pastor Tyron L. Gilliams, Jr. The Pastor is also a hip-hop music promoter and a self-produced reality TV personality. On the side, he pretends he’s running a global commodities trading firm, and this is why he’s being financially regulated this week. With Gilliams facing a federal indictment, an SEC complaint, and a civil action by investors, now is a good time to take a closer look at what we in the investment world call “Red Flags.”
Despite the poor job market, gutsy risk-takers can still find lucrative work pretending to be hedge fund managers. One particularly daring breed of pretend hedge fund manager is the so-called “free rider.” These Wall Street daredevils trade stocks using funds that they borrowed, without permission, from reputable stockbrokerage firms.
Pretend Fund Manager
Though lucrative and exhilarating, free riding in the stock market carries a few notable risks, including possible New York state criminal indictment, federal criminal charges, and SEC fraud charges, as Scott Kupersmith recently learned, a successful pretend hedge fund manager from Florida. Let’s take a closer look at Kupersmith’s free riding . . .
