Fort Lauderdale, FLType securities fraud into any Google News search and dozens of results come up. The unfortunate truth is that stock fraud happens, and sometimes honest people get scammed by fraudsters. The good news is that officials can catch and prosecute those who prey on innocent investors; but even with jail time and stiff fines, there is no guarantee investors will recover all of their losses.![Man Accused of Running .6 Million Securities Fraud Scam](/images/articles2/securities_facebook_ipo-article-2.jpg)
Recently, a man from South Florida was accused of running a scam in which he sold fake shares in Facebook Inc. and Groupon Inc. According to the
Sun-Sentinel (6/24/13), the accused pleaded guilty to scamming investors out of $13 million. He allegedly did so by encouraging investors to buy shares of the companies before they went public. The accused then took $13 million of investors’ money - including the life savings of at least one investor - and spent approximately $4 million on cars, jewelry and personal taxes.
One victim said the accused even included a fake audit letter from KPMG in his scam. Approximately 140 investors were defrauded in the scam.
The accused was sentenced to 11 years in prison. There is no word on how much, if any, of their money investors will recover. The case is
U.S. v. Mattera, 11-cr-02947, U.S. District Court, Southern District of New York (Manhattan).
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Of course, for investors who lose their hard-earned money (and sometimes their life savings), jail time is little consolation, especially where their money has gone to fund a lavish lifestyle and they might only see a portion of their losses recovered.
Recently, Jeffrey Skilling, former CEO of Enron, had his prison term reduced from 24 years to 14 years, of which approximately 6 years has been served. The reduction ends years of appeals from Skilling and was the result of a deal between Skilling and prosecutors. According to
Reuters (6/21/13), although Skilling’s prison sentence was reduced, the deal will also see $40 million distributed to people who lost money to Enron.
Skilling was charged in 2006 with conspiracy, insider trading and fraud due to his role in Enron.
USA Today (6/21/13) reports that when Enron collapsed, it took with it more than $2 billion in employee benefits and $50 billion in stock.