Posted in: "Pump and Dump" Schemes | Senior Investors | SEC |
Yesterday the Securities and Exchange Commission arrested the president and four employees of a Staten Island, New York investment advisory firm for allegedly profiting $17.5 million from phony stock tips.
The Web site for Gryphon Holdings, Inc., touted the investment knowledge and credentials of “self-made billionaires” Kenneth Maseka and Michael Warren. Through phone pitches, e-mails and internet advertising, many investors paid fees of up to $250,000 and subscribed to Gryphon’s newsletters to get timely tips. According to Gryphon, both powerbrokers had graduated from Ivy League schools, had worked at investment firms Goldman Sachs and Lehman Brothers, and were one of the most sought-after brokers on Wall Street.
Unfortunately, both Maseka and Marsh were just alter-egos of 43-year-old Gyphon president Kenneth Marsh, an unregistered broker who the SEC claims perpetrated massive securities fraud and wire fraud.
According to the Wall Street Journal, Marsh and his employees had been active since 2007, targeting mostly elderly investors and using heavy-handed sales techniques to get the alleged victims to commit more money. Over three years, the lies became more egregious.
The SEC claims Gryphon, in its marketing materials, claimed it managed a hedge fund worth more than $1.4 billion, which traders who have netted over $50 billion from investments. The firm also claimed to have operations on Wall Street, London, Sydney, California and Chicago, but in fact just had one office in a Staten Island strip mall-next to a martial arts studio and a bakery.
Gryphon’s site also featured a phony quote from international philanthropist George Soros - “Alone, the Gryphon Financial are incredible, together they are unstoppable.” - and a review from the Financial Times that also didn’t exist.
The SEC claimed Marsh and Gryphon even obtained permission to trade on the behalf of some clients. Another piece of the puzzle that will likely be scrutinized are the securities Gryphon recommended-along with affecting the share price on stocks recommended to customers, federal regulators will need to determining why the firm chose some stocks over others.
In addition to Marsh, the other Gryphon employees charged were Baldwin Anderson, 55, Robert Budion, 28, Jeanne Lada, 44, and James Levier, 34. All five face multiple counts of securities and wire fraud, punishable of up to 20 years in prison.
Gryphon’s aptly-named Web site is thewolvesofwallstreet.com
Typically we see victims of this type of fraud become hesitant or apprehensive about taking action against the financial professional who wrong them. Admitting you are a victim of the type of scheme for which Gryphon is accused means admitting your were deceived and taken advantage of. For some, this is a lot to overcome.
But assuming allegations against Gryphon are true, there many different people who were likely affected. If you now google the company name, you can find dozens of anonymous postings, which the sites claim were posted before 2009, from folks who claimed they were scammed by Gryphon. For Marsh and Gryphon to have continued their activity for three years as the SEC claimed, making a lot of money in the progress, they would have been very good at persuading victims.
Since Gryphon allegedly targeted elderly victims, the firm was intentionally going after vulnerable investors.
If you or a loved one gave your money to Gryphon Holdings expecting sound investment advice, do not hesitate to contact us. Acting quickly to try and recover your lost money is the only advisable course of action, especially now that Marsh and his employees are being pursued on both criminal and civil charges.
