Andrew Caspersen, a former managing principal at financial services firm Park Hill Group was arrested on charges that he engaged in a $95 million scheme to defraud investors. Caspersen was named in a criminal complaint filed in federal court in Manhattan that charged him with securities fraud and wire fraud. The U.S. Securities and Exchange Commission (SEC) also filed a civil lawsuit, accusing him of engaging in the fraud using a shell company he controlled whose name was similar to that of Irving Place Capital private equity fund. Park Hill Group terminated Caspersen and he was arrested on Saturday. He appeared in federal court yesterday. Caspersen allegedly obtained $25 million from a foundation affiliated with a New York hedge fund and from one of the fund’s employees by claiming their investment would be secured by $900 million of assets of Irving Place Capital Partners III SPV. Instead, he used the funds for himself, trading securities in his personal brokerage account and lost the money due to aggressive options trading. Before his arrest, Caspersen sought another $20 million from the same foundation and $50 million from another New York private equity firm.
Stoltmann Law Offices is investigating George A. Zedan, a former registered representative with LPL Financial. According to a Financial Industry Regulatory Authority (FINRA) Disciplinary Proceeding, Zedan was accused of converting an elderly customer’s funds to his own use in April 2004. Zedan transferred the 87 year old client’s funds to LPL Financial when he became a registered broker there. He then discussed a joint real estate venture with her and they subsequently purchased residential property for renovation and resale. Allegedly, the elderly client’s account was then liquidated and Zedan wrote a personal check with the client’s money to himself and deposited it in his personal bank account. Zedan never purchased real estate with the money. Instead, he purchased personal expenses and made payments on his credit cards. An arrest warrant was issued for Zedan’s arrest for Theft From Elder or Dependent Adult by a Caretaker and alleged Grand Theft of Personal Property. The client has since died and the case is ongoing. If you invested money with George A. Zedan, you may be able to recover your investment losses by calling our securities law firm and speaking to an attorney. The call is free. We sue firms such as LPL in the FINRA arbitration process to help investors recover their money.
Marijuana-related securities have blossomed in the past few years, taking the form of over-the-counter or penny stocks and special funds for accredited investors. This is because marijuana has been legalized at the state level in some states, but the fact remains that it is still not legal at the federal level. The feds still have the right to arrest any business that tries to get in on the selling of the product. In May 2014, the Securities and Exchange Commission (SEC) issued an investor alert about marijuana-related investments, in which it said “marijuana-related companies may be at risk of federal, and perhaps state, criminal prosecution. Nothwithstanding the federal ban, as of the date of this guidance, 20 states and the District of Columbia have legalized certain marijuana-related activity.” This week the Wall Street Journal published an article warning about the risks associated with Marijuana stocks.
Funds that specialize in marijuana-related securities such as the High Times Growth Fund and Marijuana Investment Co., are not public, and are currently open only to accredited investors, although Marijuana Investment Co is planning to file for an initial public offering. Mutual funds and exchange-traded funds will be looking into marijuana-related businesses soon. Says Alan Brochstein, a financial adviser who runs the newsletter “420 Investor,” “I don’t think there will be funds and ETFs in the cannabis sector for at least a couple of years. Liquidity in this space is poor, so mostly you have over-the-counter stocks trading publicly.” Legal sales of marijuana are expected to quintuple to as much as $8 billion in 2019 from $1.6 billion in 2013, according to Marijuana Business Daily.