Fri, Oct 28, 2016
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

SEC halts $42m mortgage fund Ponzi scheme

Friday, June 29, 2012

Bailey McCann, Opalesque, New York: The Securities and Exchange Commission (SEC) has halted a $42m Ponzi scheme operated by Small Business Capital Corp. and its principal Mark Feathers, who raised $42 million by selling securities issued by Investors Prime Fund LLC and SBC Portfolio Fund LLC - two mortgage investment funds they controlled. The SEC alleges that more than 400 investors were attracted to the funds by promises that profits from mortgage investments would yield annual returns of 7.5% or more.

According to the complaint, from 2009 to early 2012, Feathers improperly transferred more than $6 million from the funds to Small Business Capital to pay its expenses, including substantial payments to Feathers. The regulator also charges that one of the funds was selling mortgages to the other fund at an inflated price, thus generating a false profit that was used to pay management fees and expenses. The SEC also charged Feathers and Small Business Capital for Small Business Capital’s effecting transactions in the funds’ securities without being registered as a broker-dealer with the SEC.

"Feathers raised millions from investors by promising high returns," said John McCoy, Associate Regional Director of the SEC’s Los Angeles Office in statement. "The returns turned out to be too good to be true and were funded in part with new investors’ money."

Investors were never notified ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. David Einhorn speaks on passive investing, Mylan, his cheapest stock, the Fed[more]

    From Greenlight Capital hedge fund manager David Einhorn (Trades, Portfolio) joined nine other famed investors on Tuesday to talk about stocks at the annual Great Investors’ Best Ideas Investment Symposium in Dallas. Presenters at the annual conference typically pitch one or severa

  2. Investing - Fund set up to buy illiquid hedge fund stakes finds plenty of opportunities, Lansdowne's Roden says likes animal genetics company Genus[more]

    Fund set up to buy illiquid hedge fund stakes finds plenty of opportunities From As ValueWalk reported back in February, earlier this year Andrew Lawrence set out to raise $250 million to $500 million for a fund that will buy stakes in hedge funds that have suspended redem

  3. Opalesque Roundtable: Style drift, poor communications and credibility fatigue are biggest red flags for hedge funds investors[more]

    Komfie Manalo, Opalesque Asia: Style drift, poor communications and credibility fatigue are the biggest red flags for hedge funds investors, said participants of the latest 2016 Opalesque Investor Roundtable, sponso

  4. Barclay CTA Index down 0.40% in September (+0.10% YTD)[more]

    Managed futures traders lost 0.40% in September according to the Barclay CTA Index compiled by BarclayHedge. The Index is up 0.10% year to date. “The US Fed, in spite of its hawkish tone, opted to hold rates steady which roiled financial markets,” says Sol Waksman, founder and president of BarclayHe

  5. Opalesque Exclusive: Meet Emma, your friendly A.I. helper[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Shaunka Khire, who co-designed an artificial intelligence (AI) robot called EMMA/MANSI, talks to Opalesque