South FL Behind Only NYC In Securities, Investment Fraud


South Florida ranks No. 2 behind New York City for securities and investment fraud investigations in the U.S., leading to prosecutions of 85 defendants over the past year and a half — including 15 announced yesterday, says the Miami Herald. In late 2010, U.S. Attorney Wifredo Ferrer launched a federal securities fraud task force to operate like other law enforcement partnerships targeting South Florida's No. 1 scourges — runaway healthcare and mortgage rackets.

Ferrer said a rising number of investors have lost millions of dollars in penny-stock, market-manipulation, and Ponzi schemes since the economy's boom-bust cycle of the past decade. “Prevention is the key,” he said, urging investors to educate themselves and contact the FBI or the Securities and Exchange Commission if they suspect fraud. FBI agent in charge John Gillies said most of the new securities fraud cases resulted from undercover operations targeting penny-stock companies headed by executives who allegedly conspired to carry out traditional “pump and dump” schemes. Such scams artificially inflate, or pump, the price of the penny stocks so that the perpetrators can sell, or dump, their shares for a profit.

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