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Unregistered Broker, Unregistered Firm, & Fictitious Securities: New SEC Case

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Jun 2, 2010 12:01 pm

SEC Charges Unregistered Brokers From Unregistered Firm Sold Fictitious Securities in Affinity Scam


On May 26, 2010, the Securities and Exchange Commission (SEC) charged that between 2004 and 2009, Gedrey Thompson and GTF Enterprises, Inc., with the assistance of Dean Lewis and Sezzie Goodluck, engaged in an offering fraud and ponzi scheme, raising over $800,000 from at least 20 investors who invested in GTF. Thompson primarily targeted unsophisticated investors in the Caribbean and African-American communities in Brooklyn, New York. Securities And Exchange Commission, Plaintiff, V. GTF Enterprises, Inc., Gedrey Thompson, Dean Lewis, And Sezzie Goodluck,Defendants (May 25, 2010, United States District Court, Southern District of New York Please note that the Defendants are presumed innocent unless and until proven guilty, and that the facts presented are merely allegations.

Bill Singer's Comment: Yes, it is that easy to defraud public investors.  Far too many investors send thousands of dollars to brokers that they never met, who work at firms that they never heard of, to invest in companies that don't exist.  However, that same individual investor will spend hours online reading reviews for a $1,000 laptop, will compile exhaustive lists of the best prices for the unit, go to local computer stores to try out a given model, and then spend hours haggling over the price. 

Apparently, none of the targeted investors in this case did much -- if any -- investigation of the folks that they were dealing with or the companies involved.  Thompson, Lewis, and Goodluck didn't hold a single securities license.  GTF was not registered with the SEC and had never registered a single securities offering.  Nonetheless, during a five-year period, some 20 pigeons anted up $800,000 to invest with these unregistered persons through their unregistered entity in ficititious investments.

Clearly, you don't need to go to great lengths or be a particularly sophisticated con artist in order to scam the public.  Just promise them the moon.  Tell 'em what they want to hear. And enjoy your exotic trips, dates, and restaurants on their dollars.

Sad but true.