Cryptocurrencies: SEC Tries to Scam ICO Investors to Show Them How Easy It Is

Agency sets up a fake ICO to warn investors about the risks - Regulator has repeatedly warned investors of fraud in ICOs

A hot new initial coin offering gives investors the chance of a lifetime to make money from sun-soaked beaches and crystal-clear waters. It also provides something even more valuable: advice on how to avoid getting ripped off by fraudulent ICOs.

The Securities and Exchange Commission is pitching a fake initial coin offering to educate investors on the pitfalls of too-good-to-be-true ventures. The bogus digital currency, called HoweyCoins, has a sleek website, complete with a white paper, and pictures of made-up celebrity promoters and luxurious destinations. The token’s backers anticipate at least 1 percent daily returns and a hedge against inflation by combining “the magic of coin trading profits and the excitement and guaranteed returns of the travel industry.

Clicking on "Buy Coins Now!" redirects potential investors to the SEC’s website where they’ll find a stark warning: “If you responded to an investment offer like this you could have been scammed -- HoweyCoins are completely fake!” read more »

Senators Grill Whistleblower On Cambridge Analytica's Inner Workings

In a highly anticipated hearing before the Senate Judiciary Committee Wednesday, lawmakers questioned whistleblower Christopher Wylie, a former research director for the shadowy political data firm Cambridge Analytica, about the company's history of privacy violations, its contacts with Russia, and its work with Donald Trump's 2016 presidential campaign. But an even more fundamental question formed the crux of the inquiry: Did all of the black magic Cambridge Analytica sold to clients, from politicians to defense agencies, really even work?

The hearing came just a day after The New York Times reported that the now shuttered company is under investigation by the Federal Bureau of Investigation and the Justice Department in what appears to be a look at the company's finances. In his written testimony, Wylie confirmed he had been contacted by the FBI and the DOJ, and was cooperating with their investigation. read more »

SEC Charges Three Former Healthcare Executives With Fraud

The Securities and Exchange Commission today announced fraud charges against three former Constellation Healthcare Technologies Inc. executives who falsified financial and other information they provided to a private firm in the course of negotiating the private firm’s acquisition of a majority stake in Constellation. Houston-based Constellation filed for bankruptcy in March, a little more than a year after the January 2017 acquisition.

According to the SEC’s complaint, the executives convinced a private firm to acquire a majority of Constellation’s equity and provided fake information, including financial statements for three fictitious subsidiaries supposedly acquired for more than $62 million. The complaint alleges that the former executives funded the sham acquisitions with stock sales in London and then diverted the proceeds to themselves. read more »

U.S. charges New York fund manager with Belize airport scam

A New York investment manager was arrested on Wednesday and charged with fraudulently raising about $21.9 million that he told his investors would be used to build an international airport in Belize, the U.S. Department of Justice said.

Brent Borland, a principal at Borland Capital Group, was accused of having promised double-digit rates of return on investments related to temporary “bridge” financing for the airport in Placencia, roughly 110 miles (177 km) south of Belize City, and secured by real property in Belize.

Instead, authorities said all investors in Borland’s Belize Infrastructure Fund lost money, while the 48-year-old resident of Sag Harbor, New York and Delray Beach, Florida diverted close to $6 million to fund a lavish lifestyle for his family.

This sum allegedly included $2.67 million of credit card bills, mortgage payments on a Florida mansion, a Mercedes-Benz SUV, membership dues at the Delray Beach Club, and private school tuition for Borland’s children.

The U.S. Securities and Exchange Commission said in a related civil case that Borland invoked his constitutional right against self-incrimination when questioned by that regulator.

A lawyer for Borland did not immediately respond to requests for comment on the alleged scheme, which prosecutors said ran from 2014 through March 2018.

“Cases such as this serve as a cautionary tale for investors - always carefully vet your investments - and if something seems too good to be true, it probably is,” U.S. Attorney Geoffrey Berman in Manhattan said in statement. 

Borland was criminally charged with securities fraud, wire fraud and conspiracy counts. He faces up to 20 years in prison on each fraud count if convicted. The SEC is seeking to recoup illegal profit, impose civil fines, and obtain an asset freeze. read more »