According to Businessweek (12/27/12), the Idaho Department of Finance accused a mortgage broker of defrauding investors for personal gain, to the tune of approximately $24 million between 2004 and 2008. The mortgage broker allegedly misrepresented investments and then used investors' money to pay for his own real estate investments and to make loans to himself and family members.
The Idaho lawsuit seeks $10,000 for each violation of securities law the former mortgage broker committed, as well as attorney fees.
Meanwhile, a report by NERA Economic Consulting (1/14/13; found online at www.securitieslitigationtrends.com) suggests that the number of settlements of securities lawsuits filed by the Securities and Exchange Commission (SEC) increased in 2012. In fiscal year 2012 there were 714 settlements with the SEC, according to the report, the most since 2007 and an increase of more than 6.5 percent over 2011, which saw 670 SEC settlements. Of those 714 settlements, 537 were with individuals.
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Among the categories of lawsuit settlements that increased were insider trading (settlements were reached with 118 individuals and eight companies), misrepresentation and misappropriation by financial firms (208 total settlements), Ponzi Schemes (92 settlements) and trading violations (48 settlements).
The report, titled SEC Settlement Trends: 2H12 Update, was written by Dr. Elaine Buckberg, Dr. James A. Overdahl and Jorge Baez and was published on January 14, 2013.