International Law

Ponzi Con Criminal - Stole From Seniors

Interesting story from the SEC about Gibbs who allegedly ran a Forex Ponzi scheme.

"The Securities and Exchange Commission today announced the filing of a settled civil injunctive action in the United States District Court for the Eastern District of Virginia against Ralph Gregory Gibbs, a resident of New Haven, West Virginia, who operated an offering fraud and "Ponzi" scheme.

The Complaint alleges that since at least April 2005 through February 2007, Gibbs, doing business as Golden Summit Group, raised approximately $21 million from at least 150 investors in at least 25 states through the offer and sale of securities.

Based on Gibbs' promises that they would receive large returns on their investments and guaranteed returns of their principal, a significant number of the investors, many of whom were elderly, retired or otherwise living on limited incomes, liquidated their retirement savings or obtained home equity loans to invest the money with Gibbs."

The reason I think that this is a interesting is because the SEC claims that

"The Commission's Complaint also alleges that of the approximately $21 million he raised from investors, Gibbs deposited only approximately $8.1 million into his Forex trading account, where he subsequently lost over $6.3 million of investor funds through his trading of currencies."

Who did he lose the money to? Were these real trades or only faked up loses? Trader kickbacks? Here is person faking up statements to this clients; perfectly reasonable to think that he was faking up the losses or at least getting a kickback on his trading volumes. Be worth knowing.

Full post as published by Misleading Advertising Law on March 19, 2008 (boomark / email).