Corporate & Securities Law

SEC charges Massachusetts-based money manager in multi-million dollar Ponzi scheme. 

The SEC alleges that Michael Regan and his firm Regan & Company fraudulently obtained at least $15.9 million from dozens of investors nationwide by selling securities in his now defunct River Stream Fund. Regan provided fake account statements and tax forms to investors showing artificially inflated account balances and concealing that he did no securities trading at all for several years and suffered substantial losses on investments that he did make.  Regan falsely claimed that he earned an MBA from a major New York university and promoted a phony track record of successful securities trading and investment expertise.  Regan is not registered as an investment adviser with the SEC or any other securities regulator.

The SEC's complaint, filed in the U.S. District Court for the Southern District of New York, alleges that Regan misrepresented to investors that because of his trading expertise and successful investment track record, they could expect annual returns averaging 20 percent with minimal risk to their principal.  He promised investors that their money would be pooled into a "fund" that he would invest on their behalf in securities using a conservative, low-risk trading strategy that he claimed was based upon "short-term price trends."

The SEC alleges that Regan actually used less than half of the funds entrusted to him for trading purposes.  Instead of protecting the investors' principal and delivering the promised returns, Regan misappropriated millions of dollars in investor funds to satisfy withdrawal requests from some investors.  He used at least $2.4 million for his personal expenses, including support payments to various family members.

Separately, the U.S. Attorney's Office for the Eastern District of New York announced criminal charges against Regan for the same misconduct alleged in the SEC's complaint.

SNSFE lawyers are investigating this matter, including those entities and individuals who might have referred clients to Michael Regan and his firm Regan & Company.  Those with information should feel free to contact attorneys at SNSFE.

Source:  SEC Press Release 2009-143