Securities Law Blog

The top executive of a Boca Raton financial firm and the former president of several penny stock companies are among the five people charged in connection with a hedge fund scheme that defrauded investors of more than $200 million, according to published reports. An indictment for the US Attorney’s Office for the Southern District of Florida, charges each of the five men with six counts of wire fraud and one count of conspiracy. The indictment alleges that between October 1999 and July 2003, the five men manipulated the closing price of thinly traded shell company stocks to falsely inflate the value of Lancer Group hedge funds. The SEC had previously shut down the funds, and filed a civil lawsuit against the funds’ operators. According to the reports, the scheme allegedly netted one of the individuals, Michael Lauer, over $40 million while costing investors hundreds of millions.

For more information on this subject contact securities attorneys, Michaels, Ward & Rabinovitz, LLP.