This week, the SEC alleged that the Detroit-based EIA All Weather Alpha Fund I was actually a Ponzi scheme. The fund’s manager is charged with falsifying just about everything involved with the fund, from its performance to its audit statements. When people used this information to make investments, the SEC says that the money was instead used to pay back older investors or pay the fund manager’s personal expenses
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Seemingly every market meltdown is followed by news of a fund blowing up and a spectacular fraud. The market slid when the COVID lockdowns began. Because the decline was short-lived, there wasn’t much malfeasance uncovered. Allianz managed to have a blow up and a fraud in one fund, and this week, the German insurer settled with the SEC. It paid $1 billion in fines and $5 billion in restitution
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Cryptocurrency has been on the market for 13 years, but no one has really figured out what do with it. When money market funds were introduced to the public in the 1970s, it took people no time at all to figure out that they could use them in place of bank savings accounts. The return was higher, and the risk was so small as to be practically zero
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This week, the SEC charged a Florida firm, Synergy Settlement Services, and two of its principals with misappropriating client funds. What makes this especially awful is that the firm specialized in managing money for people with disabilities who had received funds from a personal injury settlement
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In a world of clumsy insider trading and pump-and-dump schemes, it’s always interesting when professional money managers come up with a new way to defraud investors. This week brought SEC actions involving two spectacular scandals
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