Ridiculous Fraudsters Charged By SEC
The SEC is really on it’s game so far this year. I mean, granted, catching the idiots in the case I’m about to write about wasn’t exactly rocket science, but still… mad props (yes, I’m stuck in the early 1990s. It’s cool).
Anyhoodle, on April 20, the SEC fired up the batmobile and arrested five people from Staten Island who thought it was a good idea to pretend to run a $1.4 billion hedge fund– because, you know, the SEC is made up of a group of people whose mission in life is basically just to be a major buzz kill. Thanks, Mary Schapiro. In reality, according to Business Insider, these schmucks were actually using fake names, offices, and ridiculous quotes on ridiculous (I honestly can’t think of another more appropriate word) websites to lure in investors rather than running any sort of a legit business. I’ve got to give them credit, though: these guys saw an opportunity to swindle investors and they didn’t just go with your typical Ponzi scheme– no, these guys really went above and beyond, using all of their combined creative forces to compose their fictional ten-man team of superstar grads from Harvard and Wharton. But they didn’t stop there. No, these assclowns decided to bring in the big guns and created false endorsements from the likes of the Financial Times and George Soros. It would be brilliant if it weren’t so completely unbelievable– except, here’s the thing: people actually bought it.
An example of some of the crap they were peddling, according to Business Insider:
Ken Marsh, who went by “Ken Maseka,” “Michael Warren,” and “Marcus Thorn,” according to the SEC’s complaint, was a front-man for the fake $1.4 billion fraudulent hedge fund. He described himself to investors as “Wall Street’s Most Wanted,” using this bio:
Back in 1991 Kenneth Maseka was the most sought after trader on Wall Street for his uncanny knack for finding Wall Street’s hidden gems. In 1995 his average profit exceeded 1000% per trade (not much has changed since then.)
Goldman Sachs, Lehman Brothers and Bear Stearns could not lure him away with offers of millions of dollars up front to come over. Maseka asked himself, “Where is the challenge,” and passed on their generous offers. Anyway, when you are averaging 1000% per trade there is no need to be an employee and a few million dollars is nothing in the long-term scheme of things. (Emphasis ours.)
But, as it turns out, Ken Maseka is a fictional character of Ken Marsh’s invention. The company also made up the rest of its other employee’s names, and fudged the fact that Maseka and Michael Warren were billionaires. A quick fact check of Forbes’ billionaires list by any potential investor doing even the most routine due diligence would have tipped them off that something was rotten in the state of Denmark. Also fake: Gryphon’s Wall Street address. Their real office is in Staten Island in between a martial arts school and a bakery. Classy.
Better yet, these guys posted “press” from the FT, which supposedly wrote:
This secret group has identified as the latest hedge fund to exploit the weakening sub prime markets – pounding stocks down to nothing and making billions along the way, one hedge fund run by this group had been rammed to see returns of over 1000% in 2007.
But the most deliciously deceitful part of the scam is that they went so far as to post a fake quote from, of all people, George motherfu$&ing Soros on their website pretty much saying that these guys were the shit.
“Alone the traders of Gryphon Financial are incredible, together they are unstoppable”
– George Soros
I mean, really? I honestly can’t believe people bought this crap.
According to Business Insider, some of the other BS they posted on one of their related sites (Gryphon Daily) included:
* “Join this Exclusive Service or Go Broke!”
* “It’s like having your own mini Hedge Fund”
* 9 out of every 10 trades will hit 100% profit status?
* Returns of Up to 483% in Less Than 2 Months?
* Just this once – step outside your comfort zone – buy stocks without prejudice and don’t look at the numbers, don’t look at the chart, buy the stock the minute you hear from us and don’t sell a single share until we tell you to – do this and you are rich, do not and continue to invest in mediocrity.”
Sadly, a surprising number of people fell for it. The five alleged fraudsters ended up scamming some $17.5 million from unsuspecting investors.
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