Home » affinity fraud

Category: affinity fraud

Frat Bro Ran Ponzi Scheme

The SEC charged a University of Georgia undergraduate with running a Ponzi scheme out of his fraternity house. The SEC asserts that he utilized group texts to solicit others associated with the university to invest in a hedge fund which did not exist. He also used on-line cash applications as a means for one investor to send money to other investors to further his scheme. The respondent touted high historical returns and false credentials. The SEC contends that the respondent used the funds for personal expenses including gambling junkets and adult entertainment.

Affinity-based Ponzi schemers will use their positions of trust to swindle funds from the naïve and unsuspecting. In this case, the tools may be new (group texts, cash apps, fraternity), but the con job is as old as the securities markets. Tell your friends and family not to give money to anybody without checking the SEC website and making sure the “manager” is registered.