Corporate & Securities Law

Attorneys at SNSFE have launched an investigation into the relationship between Ponzi scheme operator Frank Bluestein of Michigan and his last brokerage firm, GunnAllen Financial. 

In the news, the SEC charged Detroit-area stock broker Frank Bluestein with fraud, alleging that he lured elderly investors into a $250 million Ponzi scheme after convincing many of them to refinance their home mortgages.

The SEC alleges that Bluestein acted as the single largest salesperson in the Ponzi scheme operated by Edward May and his company, E-M Management Company LLC.  The SEC previously has filed charges against May and E-M in connection with the fraudulent scheme.

The SEC alleges that Bluestein specifically targeted potential investors who were retired or elderly and conducted so-called "investment seminars" in Michigan and in California to lure them into investing in E-M securities. 

The SEC's complaint, filed in the U.S. District Court for the Eastern District of Michigan, alleges that Bluestein facilitated May's fraudulent scheme by raising approximately $74 million from more than 800 investors through the sale of E-M securities over a five-year period.  Bluestein, through his company Maximum Financial, conducted numerous investment seminars to find new E-M investors.

As part of that five-year period, between March 2005 and October 2007, GunnAllen Financial employed Bluestein.  GunnAllen Financial had a duty to supervise the activities of Bluestein and had a duty to detect and to deter outside business activities such as this Ponzi scheme.

Those investors with Bluestein during the 2005-2007 time period should contact SNSFE to further discuss this matter.

Source:  SEC Litigation Release 21223