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Stories of Interest
- Sarah ten Siethoff is New Associate Director of SEC Investment Management Rulemaking Office
- Catherine Keating Appointed CEO of BNY Mellon Wealth Management
- Credit Suisse to Pay $47Mn to Resolve DOJ Asia Probe
- SEC Chair Clayton Goes 'Hat in Hand' Before Congress on 2019 Budget Request
- SEC's Opening Remarks to the Elder Justice Coordinating Council
- Massachusetts Jury Convicts CA Attorney of Securities Fraud
- Deutsche Bank Says 3 Senior Investment Bankers to Leave Firm
- World’s Biggest Hedge Fund Reportedly ‘Bearish On Financial Assets’
- SEC Fines Constant Contact, Popular Email Marketer, for Overstating Subscriber Numbers
- SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
- Cryptocurrency Exchange Bitfinex Briefly Halts Trading After Cyber Attack
- SEC Names Valerie Szczepanik Senior Advisor for Digital Assets and Innovation
- SEC Modernizes Delivery of Fund Reports, Seeks Public Feedback on Improving Fund Disclosure
- NYSE Says SEC Plan to Limit Exchange Rebates Would Hurt Investors
- Deutsche Bank faces another challenge with Fed stress test
- Former JPMorgan Broker Files racial discrimination suit against company
- $3.3Mn Winning Bid for Lunch with Warren Buffett
- Julie Erhardt is SEC's New Acting Chief Risk Officer
- Chyhe Becker is SEC's New Acting Chief Economist, Acting Director of Economic and Risk Analysis Division
- Getting a Handle on Virtual Currencies - FINRA
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NEWSLETTERS & ALERTS
The Betting Line – ‘Zero Pay Off’ On a Sports Betting Scam
[Image: Sports Betting / Las Vegas Review-Journal.com]
by Howard Haykin
The Securities and Exchange Commission (“SEC”) recently reported that it busted a sports betting scam that raised at least $29.5 million from over 600 investors. Two convicted felons, John Thomas and Thomas Becker, master-minded the scheme, and their network of 150 brokers and agents enticed investors from more than 40 states to invest in a pooled fund that would be used for betting on sporting event.
Investors were told that Thomas and Becker had a proprietary handicapping system that could “grow money 10 times faster than Warren Buffet.” Actually, investors were promised 250%-600% returns on their investments, and others were promised a “low-risk way to TRIPLE your funds in less than 6 months.”
Once on board, investors were given access to personalized spreadsheets that tracked their accounts, which increased or decreased based on falsified and exaggerated results of supposed sports betting. Yet, investors were only too happy to believe that their investments performed as promised, when they had not. And investors who sought payment on their winnings were often willing to accepted explanations that their funds could not be disbursed because all the winnings were in cash and could not be deposited into bank accounts. In actuality, Thomas and Becker spent little on sports betting, and instead used most of the investors’ money to fund their lifestyles, pay commissions to brokers and agents, or make Ponzi-like payments to other investors.
INVESTORS LULLED BY FAR-FLUNG DREAMS. Once again, investors chased promises of exaggerated investment returns and then were lulled into believing fictitious performance figures from the perpetrators. Prudent investors recognize red flags when they are promised returns that are unrealistically too good to be true.