Ponzi Scams: FINRA Bars Ex-Raymond James Broker Over $3M Ponzi Scam, Expels Success Trade Securities, Inc. for Bilking NFL and NBA Players

The Financial Industry Regulatory Authority is ordering Success Trade Securities Inc. and its President and CEO Fuad Ahmed to pay 59 investors, mostly current and ex-NBA and NFL players, about $13.7 million in restitution for losses they sustained in a Ponzi scam. Success Trade is now expelled from FINRA membership and Ahmed is also barred.

According to a FINRA hearing panel, between 2/09 through 3/13, the firm and Ahmed sold $19.4 million in bogus promissory notes to investors while omitting or misrepresenting material facts. These facts would have revealed that parent company Success Trade Inc. was in financial trouble.

Ahmed and the firm are also accused of misrepresenting that the funds would go toward costs for marketing and growing the businesses of the parent company. The SRO says that the funds instead went toward went toward unsecured loans to Ahmed for his personal spending and to pay interest payments to note holders.

In an unrelated Ponzi fraud, FINRA is barring Claus C. Foerster, a former Raymond James Financial Inc. (RJF) broker, for allegedly bilking clients of approximately $3 million. According to the SRO, Foerster convinced clients to move money they had in brokerage accounts into SG Investments, which was a nonexistent income fund that was actually a bank account that he controlled.

Clients received bogus account statements and some were paid dividends on a monthly basis. The fraud, which FINRA says began in 2000, purportedly went on until May 20014.

Earlier this month, Raymond James fired Foerster. The firm is the one that notified authorities and FINRA. It also has started paying restitution to clients.

Foerster accepted the industry ban and FINRA’s filing without denying or admitting to the charges.

Another alleged Ponzi scam artist is facing criminal charges in his alleged $15 million Ponzi scam. Race car driver Brian C. Rose. He has been indicted for allegedly bilking 164 investors in different states. These investors thought they were putting their money in coal mines.

Rose and eight others now face money laundering and fraud charges. He allegedly used investors’ money to purchase race cars, thoroughbred horses, and other luxuries, as well as to support his living expenses. $10 million of investor money has not been accounted for. Rose’s father, David G. Rose, previously served time behind bars for his own $15.4 financial scam.

Ponzi Scams
A Ponzi scheme is an investment fraud. This type of scam typically involves using new investors’ money to pay paying ” returns” to older investors. This gives the false appearance that investors are involved in an actual business that is making money.

Because Ponzi scams have no legitimate earnings, they can fail when the new investor money runs out or when too many investors want to cash out. Common signs you may be involved in a Ponzi scheme:

· You were promised high investment returns and hardly any/no risk
· Your returns are too consistent
· The sellers that are not licensed
· Investments are unregistered
· Complex investment strategies are involved
· You aren’t receiving your payments
· You are having trouble cashing out
Please contact our securities fraud lawyers today. We can help you determine whether you have grounds for pursuing a civil lawsuit.

FINRA Hearing Panel Expels Success Trade Securities and Bars CEO Fuad Ahmed for Fraudulent Scheme, FINRA, June 25, 2014

Swindler’s son accused of own $15M Ponzi scheme, The Courier-Journal, June 27, 2014

Finra Bars ex-Raymond James Broker Accused of $3 Million Scam, The Wall Street Journal, June 20, 2014

More Blog Posts:
Man Convicted in $46M Michigan Ponzi Scam, Stockbroker Fraud Blog, May 20, 2014

Finra Bars ex-Raymond James Broker Accused of $3 Million Scam, The Wall Street Journal, June 20, 2014