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Philadelphia

Investor Fraud in 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 90s, it has been reported that a notorious Ponzi Scheme was set up under the guise of philanthropy, named the Foundation for New Era Philanthropy, that 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

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Testimonials From Former Clients
★★★★★
I highly recommend Jenice and her team at Malecki Law. I had a challenging, and lengthly case. Jenice was professional, very knowledgeable, and a pleasure to work with. She managed to make the process far less stressful during a very difficult time. They care about their clients, and it definitely shows. Mario
★★★★★
Jenice is truly a miracle worker and one of the top securities lawyers. She handled a very difficult case for us, displaying her legal knowledge, intelligence, and savviness throughout the process. I cannot recommend her enough. The quality of work from her team rivals that of corporate law firms. She was always available, extremely professional, and made sure to know all the details of the case. We were very fortunate to have been referred to Jenice and highly recommend her for any securities related legal issues. Nathan A.
★★★★★
An excellent professional who represented us in trial regarding a bank fraud, an unexpected and difficult time. A professional that worked hard, persevering and who stood toe to toe against firms that had a team of excellent lawyers backing them up. Her unflinching determination really stands out, it makes you feel you have someone who really cares about trying to recover what you lost from the people that wronged you. Salomon Levi
★★★★★
It is difficult to thank you in words when gratitude comes from the heart, so I will try to link feelings with writing. It is essential for us to mention your excellence as a professional, your aptitude on legal fields, and your unavoidable persistence. All of these virtues that elevate the profession you exercise in such an admirable way, go hand in hand with your sense of ethics, your human warmth and the transparency in your actions. To sum up, thank you for being a listening ear and for having the right word while transmitting information about the legal process. Having you as our representative during such an adverse situation was a privilege and enough reason for our eternal gratitude. Angeles Aparain
★★★★★
To say that my securities litigation was complex would be a severe understatement. With multiple parties involved and spanning many years, trying to understand the issues was daunting to say the least. Jenice and her team broke down the transactions by segment and by party uncovering every hidden expense. In the end, I was more than happy and could not thank Jenice and her team enough. I would not hesitate to recommend Jenice to anyone. She is highly professional, incredibly knowledgeable, well connected to industry experts, has a tireless work ethic and is so pleasant and easy to communicate with. Five stars for sure! Andrew Loughrane