Securities Fraud Charges in Georgia

Securities Fraud Charges in Georgia

Securities fraud is a big problem in Georgia. Lots of people get charged with it every year. I wanted to write about some of the recent cases and what they mean.

What is Securities Fraud?

Securities fraud happens when someone lies or tricks investors when selling stocks, bonds, or other investments. It’s against the law to make up facts or not tell important info to get people to invest their money. Some common ways people commit securities fraud are:

• Insider trading – using secret info to trade stocks
• Ponzi schemes – paying off old investors with new investors’ money
• Misstating financials – lying about company revenues, profits, assets, etc.
• High-pressure sales tactics – aggressively pushing people to invest in something risky or fake

Securities fraud can happen with traditional investments like stocks but also with new stuff like crypto. The penalties are really serious – people can go to prison and get fined millions of dollars!

Recent Securities Fraud Cases in Georgia

GA Investors Crypto Scheme

In May 2023, the SEC charged a company called GA Investors with doing a sketchy crypto scheme [1]. They had dozens of websites that promised crazy returns like 61.9% in 24 hours if you invested in their crypto mining pools. This was obviously too good to be true.

The websites looked real and some even pretended to be legit investment companies. But it was all fake. The SEC said GA Investors just took people’s money and didn’t actually invest it in anything. They scammed investors out of $85,000 before the SEC shut them down.

Real Estate Investor Securities Fraud

In April 2021, this guy Richard Randolph got charged by federal prosecutors for securities fraud related to real estate investing [2]. Randolph ran a company called Randolph Acquisitions that supposedly did real estate investing. He sold investments in his company to people and promised returns of 20% per year.

But it was a scam. Randolph didn’t really invest the money in real estate, he just spent it on himself. When investors wanted their money back, he couldn’t pay them. Randolph ended up getting sentenced to over 2 years in prison for the $550,000 fraud. The judge said he showed no remorse and had to be punished.

Tech Company CEO Securities Fraud

Also in 2021, this CEO named Richard Randolph (no relation to the other guy) got busted for securities fraud at his tech company [3]. He lied to investors about how much revenue his company was making and how much assets they had. He said the company was worth millions when it was really worth way less.

The CEO wanted to sell the company so he made up the numbers to trick potential buyers. He ended up getting caught and sentenced to over 5 years in prison. The judge told him “truth matters” in securities dealings and he had to face consequences.

Incarcerated Felon Securities Fraud Scheme

The SEC busted this crazy scheme in October 2022 where an incarcerated felon and his friends defrauded brokerage firms out of $2 million [4]. The felon’s name was Syed Arbab and he ran the scheme from prison using contraband cell phones!

Here’s how it worked. Arbab and his friends opened brokerage accounts and deposited bogus checks or did empty bank transfers to get instant credit. Then they quickly bought securities before the brokerages realized the money wasn’t real. When the deposits bounced, the brokerages were left holding the bag.

Arbab was already in prison for running a Ponzi scheme on college kids. But that didn’t stop him from continuing to commit fraud. The SEC is going after Arbab and his friends for penalties and to ban them from securities trading. The brokerages lost over $146,000 from their shenanigans.

What Does This Mean?

These cases show that securities fraud is alive and well in Georgia. The SEC and Department of Justice are aggressively going after scammers and shady business people. It doesn’t matter if you’re doing fake crypto investments, lying about real estate assets, cooking the books, or running pump-and-dump schemes – they will catch you!

Some takeaways:

• Don’t believe investment pitches that promise ridiculous returns. If it seems too good to be true, it probably is.
• Watch out for pressure tactics and flashy marketing from brokers or advisors. This could indicate a scam.
• Research any investment opportunity and the people running it thoroughly before handing over money.
• Beware of new cutting-edge investments like crypto that aren’t well regulated yet.
• Report any suspected investment fraud to the SEC or FBI immediately.

Securities fraudsters end up facing serious prison time and fines. It’s just not worth the risk. If you have questions about an investment opportunity, talk to a lawyer first. Hopefully these cases make people think twice before engaging in shady practices that hurt innocent investors.