The SEC is on a roll, making its second Ponzi bust since the Bernie Madoff scandal. Ok, it’s not $50 billion, try $50 million:
The Securities and Exchange Commission has charged a Philadelphia-area investment fund manager and his firm for conducting a multi-million dollar Ponzi scheme, and has obtained an emergency court order freezing their assets.
According to the SEC’s complaint, Joseph S. Forte of Broomall, Pa., fraudulently obtained an estimated $50 million from as many as 80 investors through the sale of securities in the form of limited partnership interests in his firm, Joseph Forte, L.P. The SEC alleges that Forte told investors that he would invest the funds in an account that would trade in securities futures contracts, including S&P 500 stock index futures. According to the complaint, despite the impressive and consistent returns he reported to investors, Forte consistently lost money in the limited trading that he did, withdrew millions of dollars in so-called fees for his personal use based on the falsely inflated value of Forte LP, and used investor funds to repay other investors.
Actually, we’re not that impressed by the SEC. According to the announcement, the scam has been going on since 1995, with Forte promising crazy returns the whole time. How did it unravel? Forte can thank Bernie Madoff. That’s what prompted his own investors to get some verification
Philly Inquirer: The world of Broomall investment manager Joseph S. Forte unravelled last month after the Bernard L. Madoff scandal broke in New York.
The Madoff case prompted Devon resident Gibbs LaMotte – Ivy League lacrosse player, 1962 Yale graduate, and Forte investor – to ask for a confirmation of assets in the fund, valued at about $150 million on Sept. 30.
“There was no response” to the e-mail, La–Motte said yesterday. “I don’t know, but I suspect there were numerous others” who did the same thing and may have even tried to get their money out of Forte’s fund, LaMotte said.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.