by Michael Tarsala
You would think someone’s BS detector should have triggered a lot sooner.
The SEC this week charged a California investment adviser with operating a $60 million Ponzi scheme under the name GLR Growth Fund.
The adviser’s marketing materials claimed the fund was returning between 17% and 25% a year since 2003 by investing in common stock indexes including the S&P 500 (SPX) and the Dow Jones Industrials (DJI).
Even more outlandish, the fund supposedly returned 24% in 2008 — the year of the Great Recession, when the S&P lost 38.5%.
Investment fraud is still happening all the time — even after all the awareness following the fall of Bernie Madoff. According to the Center for Retirement Research at Boston College:
- The FTC reports more than 1.5 million fraud complaints, up 62% in three years
- This trend will likely continue
- Consumers can best protect themselves by recognizing common fraud strategies
Back in late March, I had an interview with former SEC enforcer Pat Huddleston, author of The Vigilant Investor, who says another big Madoff-like scandal is possible — and probably inevitable. He also provides details about some of the most common frauds now making the rounds.
You can see the full interview below.
