SEC Stops Minnesota Securities Fraud

The Securities and Exchange Commission has filed fraud charges against James M. Louks and FiberPoP Solutions Inc., accusing them of bilking almost 100 investors by persuading them to invest in notes that were in theory supposed to help fund the operations of the company. An emergency order was issued stopping the Minnesota resident and FiberPop to prevent them from continuing to raise investor funds under false pretenses without generating the returns that were promised.

Louks and the firm had promised swift investment returns of up to 100%. Although FiberPoP was founded in 2003 it still has no employees or operations. The SEC said that the investments that were solicited have the “hallmarks of prime bank schemes,” which promote secrecy and exaggerated returns in purported complex investments that are fake.

The Commission said that Louks pursued investors for years while knowing that none of the supposed financing opportunities would ever go toward investor returns or company funding. Louks and FiberPop consented to the SEC order without denying or admitting to the charges.

Prime Bank Investments
On, the SEC warned that prime bank investments are not real. They are scams. These programs usually claim that investor money will go toward purchasing and trading Prime Bank instruments.

Promoters use complex and legitimate sounding terms, such as debentures, bank guarantees, discounted U.S. Treasury securities, standby letters of credit, and others, to make the securities scam appear real.

Secrecy, exclusivity, and confidentiality may be further clues of a scam. Investors in prime bank investments may be asked to sign non-disclosure statements. They may be told that the secret trading program has been sanctioned by the Federal Reserve, the World Bank, the Treasury Department, the International Monetary Fund, or the International Chamber of Commerce.

The US Treasury Department, on its website, noted that no secret markets exist in which banks actually trade securities.

Shepherd Smith Edwards and Kantas, LTD LLP is a securities fraud law firm.

SEC Complaint (PDF)

Prime Bank Schemes, SEC

Contact Information