Tuesday, December 9, 2008

Wealthy NYC Lawyer Admits $150 Million Securities Fraud

DOH! From the "hard to believe" news department, prominent New York city lawyer Marc Dreier (formerly represented Jon Bon Jovi and Jay Leno) recently admitted to selling fake securities worth millions to unwitting investors. According to a release issued by the U.S. attorney’s office in New York and an accompanying criminal complaint, Dreier was arrested late Sunday night, presumably upon his arrival back in New York, on charges stemming from a $100 million fraud against various hedge funds. The SEC also filed suit against Dreier on Monday, Dec. 8th, alleging that he has been marketing and selling fake promissory notes to investors. Click here for the SEC’s complaint. In a related announcement on Monday, the U.S. Securities & Exchange Commission charged Dreier with attempting to raise more than $113 million as part of a "stunning, brazen fraud that targeted some very sophisticated investors." Wachovia Bank also sued Dreier LLP and Marc Dreier (in addition to a handful of others) today, alleging that a credit revolver and term loan extended to the firm are in default, as of November 1, upon which the bank is owed some $12.7 million. Click here for a copy of the complaint.

What's odd is that Dreier is a wealthy individual, who did not appear to be in financial trouble. Because of the sophisticated parties he was defrauding, he would most certainly be caught. So why commit fraud? Greed? Ego? Insanity? From a distance it looks like a lemming jumping off a cliff.

Read more: Marc Dreier

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