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International Law

: Misleading Advertising Law

Regan Ponzi

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From the SEC Press Release on the Regan Ponzi scheme.

The Securities and Exchange Commission today charged Michael C. Regan (Regan) and his firm, Regan & Company (Regan & Co.), for conducting a multi-million dollar Ponzi scheme that touted safe investments and provided lofty, but false, investment returns.

The Commission alleges that from 2001 through April 2008, Regan and Regan & Co. fraudulently obtained at least $15.9 million and ultimately caused investors to lose at least $6.69 million through Regan's misappropriation and trading losses.

Regan and Regan & Co. have agreed to settle the Commission's charges, without admitting or denying the allegations.

The Commission's action, filed in the U.S. District Court for the Southern District of New York, alleges that over an eight year period Regan offered and sold securities in his now defunct investment fund, dubbed the River Stream Fund, by falsely representing to investors that he would invest their funds in the stock market.

Regan also represented that, because of his trading expertise and successful investment record, investors could expect annual returns averaging twenty percent, with minimal risk to their principal.

Contrary to his representations, Regan did no securities trading at all for several years, used less than half of the funds entrusted to him for trading purposes, and suffered substantial losses on investments that he did make.

Regan repeatedly concealed his misconduct and deceived investors by preparing and sending them fictitious account statements and tax forms showing artificially inflated balances and returns.

Instead of protecting the investors' principal and delivering the promised returns, Regan misappropriated and used millions of dollars of investor funds to support his extravagant lifestyle and to satisfy withdrawal requests from some investors.