On Feb. 15, it was reported that a California-based investment banker was sentenced to prison after being convicted of fraud charges in 2016. The man, age 46, was convicted of securities fraud, investment adviser fraud and conspiracy after he became involved in a scheme to manipulate shares at a reinsurer that has since gone out of business.
Prosecutors stated that the man headed a subsidiary and had control over the defunct reinsurer through his associates. He was ultimately able to amass approximately half of the former company’s public float without revealing who he was. After supposedly bribing investment advisers to purchase shares for their own clients, he was able to sell shares from his own account and ultimately generated approximately $20 million in profits. He was sentenced to 11 years in prison.
The man is also involved in a second case where prosecutors claimed that he misappropriated the proceeds of a bond that was issued by a Native American tribe. He was scheduled to be sentenced for this case in May in a federal court in Manhattan.
People who have been accused of being involved in investment fraud could face significant penalties, including lengthy imprisonment and steep fines, if a conviction is obtained. Those who have professional licenses will most likely have them suspended. When the charges include fraud, the prosecution must demonstrate to the jury beyond a reasonable doubt that the defendant possessed the specific intent to defraud others, and thus a criminal defense attorney might argue that such intent was lacking on the part of the defendant.
Source: Reuters, “U.S. investment banker gets 11 years in prison for stock scam“, Nathan Layne, Feb. 15, 2017