Woman Lies to the SEC !

Investing Basics - Beware of Frauds and Scams

If you are at all interested in online stock trading, the first thing you need to do is to avoid giving your money to a crook or a fraudster. Not easy you may think in the light of the Bernie Madoff and Allen Stanford scams - see What is a Ponzi Scheme.

Now even women are getting in on the act ! What is the world coming to ? A woman telling lies? How is this possible ?

The SEC has today charged a money manager for creating a fictitious billion-dollar client with the aim of gaining credibility and attracting legitimate investors.

The unusual thing about this complaint is that the money manager in question is a woman. But is this unusual ? Or is it unusual that it should be considered unusual ?

The SEC has charged Leila Jenkins and her firm, Locke Capital Management Inc., with "making up the supposedly massive client and then repeatedly lying about its existence to land real clients".

According to the SEC, Jenkins lied to SEC staff about the "existence of the invented client and furnished the SEC staff with bogus documents in 2008, including fake account statements that she created".

"Today's enforcement action demonstrates that investment advisers who lure clients with false claims will be held accountable for their actions," said George Curtis, of the SEC's Division of Enforcement. "In this case, the conduct was particularly egregious because Jenkins lied to the SEC staff to try to escape detection."

The SEC's complaint alleges that Jenkins invented "confidential" client accounts, in Switzerland, and claimed these accounts had more than $1 bn in assets.

Falsehoods were communicated in brochures, submissions to online databases, meetings, and in SEC filings.

"This brazen web of lies to investors constituted a serious breach of fiduciary duty," said David Bergers, Director of the SEC's Boston Regional Office.

The SEC's complaint also alleges that Jenkins and her firm told further lies to investors, including misrepresenting Locke's performance for years, during which time Locke had no clients and deceiving clients about the number, identity, and role of its employees.

This fraud doesn't seem to be on the scale of Bernie Madoff or even Allen Stanford, but people find it odd because it was perpetrated by a woman ! I guess statistically there are more investment frauds carried out by men, but then there are more men working in investment than women too.
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