Philadelphia

Arguably the birthplace of our country, Philadelphia is rich in historical tradition. Unfortunately, part of that history includes investor frauds and Ponzi schemes that cost investors millions of dollars.

In the nineties, it has been reported that a notorious Ponzi Scheme was set up under the guise of philanthropy, named the Foundation for New Era Philanthropy, which raised over $500 million from 1100 donors (mostly Christian charities in Philadelphia) and embezzled $135 million. In 2009, charges were filed against Joseph S. Forte, a fund manager for allegedly running a $50 million Ponzi scheme for over a decade and was finally sentenced to 15 years in prison.

Not long ago, a biometric device and software startup company called Fallcatcher was allegedly claimed responsible for duping multiple investors out of almost $5,000,000 dollars. The company’s stock was sold to individuals that were allegedly misinformed about rising investor interest in the company. The Securities and Exchange Commission charged Fallcatcher with defrauding investors and subsequently obtained a court-ordered asset freeze to protect investor capital from being dissipated. According to the SEC, Henry Ford, Fallcatcher’s founder allegedly fabricated evidence assuming investor interest in the company although none of the investors corroborated that evidence. With an ongoing investigation in place, Fallcatcher seems to be in hot water for antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.

In August 2019, Brenda Smith was reportedly charged with investment advisory fraud that involved investments that valued over $100 million dollars. The investment advisor who manages Broad-Reach Capital reportedly hoaxed multiple investors to invest millions of dollars, promising that the money would be properly invested into profitable publicly traded securities. Instead, Smith used that money for personal use, including clearing up his other financial liabilities. It is alleged that false documentation of inflated company assets coerced investors into believing that their investments were secure and emanating profits. A violation of trust, breach of fiduciary duty and misusing entrusted funds apparently resulted in a charge for violating anti-fraud provisions of securities laws. The company faced an asset freeze and were ordered to pay restitution to the investors.

As of March 2020, professional football player Mychal Kendricks alongside family friend and tipper, Hamed A Ettu, were reportedly the subject of final judgments in the United States District Court for the Eastern District of Pennsylvania regarding insider trading. Kendricks was in hot water for allegedly exchanging private information about corporate mergers for a personal profit of over a million dollars. They used secure tips from an analyst at an investment bank to make profits on private corporate information. Kendricks and Ettu exposed themselves to several legal charges including violations of the Securities Exchange Act, securities fraud, and restitution of ill-gotten gains. Kendricks and Ettu plead guilty to securities fraud. Although Kendricks has yet to be sentenced, Ettu faces home detention for 9 months and probation.

Malecki Law represents clients from diverse geographical locations, ensuring support when clients are entangled in fraud and other wrongdoing.

Securities fraud, unsuitability claims, commercial litigation, audits, regulatory proceedings, and other common law and statutory actions are just a small fraction of what we do to bring justice to our clients at Malecki Law. From working on the famed class action In re Crazy Eddie in the counsel’s office for the lead plaintiffs to providing counsel in regulatory matters regarding securities fraud, Ms. Malecki has extensive experience and knowledge in her field. Malecki Law stands ready to help you through that process.

To schedule a free initial consultation with Malecki Law, please call (212) 943-1233, or email jenice@maleckilaw.com.