Abidog v. New York Life Insurance Co. was filed in the Superior Court of the State of California on June 18, 2021, seeking damages and rescission of unregistered promissory notes sold in a Ponzi scheme that deprived elderly and other unwitting investors of their life savings.  The fifteen-count complaint alleges violations of California statutory and common law, as well as federal securities law.

Defendant Felix Chu is a former agent of Defendants New York Life Insurance Company and NYLIFE Securities LLC (collectively, “New York Life”) who used his role at New York Life to perpetrate the Ponzi scheme.  Plaintiffs are investors in the scheme.


Continue Reading New Complaint – Abidog v. New York Life Insurance Co.

SEC v. The Estate of Kenneth J. Casey is a case filed by the SEC in the United States District Court for the Northern District of California on June 2, 2021, claiming that Kenneth Casey (“Casey”), the founder of Professional Financial Investors, Inc. (“PFI”), a real estate investment and management company, personally misappropriated over $10 million from investors as part of a scheme where Casey falsely told investors that their money would be used to invest in multi-unit residential and commercial real estate. Specifically, the complaint alleges that Casey violated 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5, and Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].

According to the complaint, Casey’s fraudulent scheme began to unravel shortly after his death, when questions arose about the solvency of PFI and one of Casey’s other companies, PISF. The SEC had previously filed an action against the president of PFI for his role in a fraudulent scheme to misappropriate funds from investors.


Continue Reading New Complaint – SEC v. The Estate of Kenneth J. Casey

Wiand v. ATC Brokers Ltd, et al. was filed in U.S. District Court for the Middle District of Florida, on May 28, 2021.  The complaint was filed by a Receiver appointed in an action brought by the Commodity Futures Trade Commission (the “CFTC”) alleging the operation a Ponzi scheme.  The alleges (1) aiding and abetting fraud, (2) aiding and abetting breach of fiduciary duties, (3) gross negligence, and (4) simple negligence.  In addition, the complaint seeks to avoid alleged fraudulent transfers received by ATC Brokers Ltd.

Plaintiff is the court appointed Receiver over Oasis International Group, Limited, Oasis Management LLC, and Satellite Holdings Company (the “Oasis Entities”) in an action filed by the CFTC, titled Commodity Futures Trade Commission v. Oasis International Group, Limited, et al., Case No. 8:19-cv-00886-VMC-SPF (M.D. Fla. Apr. 15, 2019).  Defendants include: (1) ATC Brokers Ltd., the exchange firm the Ponzi scheme operators used to carry out the scheme; (2) Spotex LLC, the entity that provided the software used to carry out the Ponzi scheme; and (3) an owner of both entity Defendants.


Continue Reading New Complaint – Wiand as Receiver for Oasis International Group, Limited, et al. v. ATC Brokers Ltd, et al.

Whitmore v. Horwitz was filed in the Central District of California on April 20, 2021, seeking class certification and unspecified civil damages. The complaint alleges fraud by omission, aiding and abetting fraud, breach of fiduciary duty, and aiding and abetting breach of fiduciary duty.

Plaintiffs are a group of investors seeking to represent a class of those who invested in Horwitz’s company, 1inMM Capital, LLC (“1inMM”). The defendants are Zachary Horwitz, 1inMM, and City National Bank (“City National”), the bank that Horwitz and 1inMM used.


Continue Reading New Complaint – Whitmore v. Horwitz

IMG Memorial Fund 1 was filed in the Southern District of New York on April 14, 2021, alleging that various defendants, including individuals and investment funds, violated federal securities laws and the common law through their use of a proprietary trading platform.  Specifically, the complaint alleges violations of Sections 10(b) and 20(a) of the Securities Act, along with common law claims for breach of fiduciary duty and negligent misrepresentation.

Plaintiff IMG Memorial Fund 1 is a family investment fund.  Defendant Jeffrey Spotts is the principal individual who created various investment funds, including the Prophecy Special Opportunities Fund and Prophecy Special Ops GP LLC (collectively, “Prophecy”).  Defendant Vantage Consulting Group is an investment advisor with an ownership interest in defendant investment fund First Landing Fund LLC, which is co-controlled by individual defendants, Mark Finn and David Schippers (collectively, “First Landing”).


Continue Reading New Complaint – IMG Memorial Fund 1, LLC v. First Landing Fund, LLC, et al.

The SEC filed SEC v. Silver in the United States District Court, Southern District of New York on April 13, 2021, claiming Defendant Silver orchestrated and carried out a string of frauds to cover up tens of millions of dollars in losses on bad bets to keep his investment advisory business afloat. Specifically, the complaint alleges violations of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, and Section 17(a) of the Securities Act of 1933.

Defendant Silver was the co-founder, managing partner, and chief operating officer of his business, International Investment Group LLC (“IIG”), which specialized in advising clients in investments in emerging market economies. IIG formed three private funds with stated strategies of investing trade finance loans marketed to qualified institutional investors.


Continue Reading New Complaint – SEC v. Silver

The SEC filed SEC v. Horwitz in the Central District of California on April 5, 2021, alleging that Defendant Horowitz violated federal securities laws in connection with fraudulent promissory notes issued by Horwitz’s company. Specifically, the complaint alleges violations of Sections 17(a) of the Securities Act, 10(b) of the Securities Exchange Act, and 10b-5 of the Exchange Act Rules.

Defendant Horwitz was the owner and operator of Defendant 1inMM, which purported to be a company in the business of obtaining distribution rights to certain movies in order to license those rights to media companies like Netflix and HBO.


Continue Reading New Complaint – SEC v. Horwitz

Plaintiff Surefire Dividend Capital, LP (“Plaintiff”) filed Surefire Dividend Capital, LP v. Industrial and Commercial Bank of China Financial Services LLC in the Supreme Court of New York for the County of New York on April 15, 2021, claiming at least $46,598,676.84 in money damages, along with its costs and attorneys’ fees.  Specifically, the complaint alleges claims for aiding and abetting fraud and aiding and abetting breach of fiduciary duty against Defendant Industrial and Commercial Bank of China Financial Services LLC (“ICBC”).

Plaintiff is an entity investor in Broad Reach Capital, LP (“Broad Reach”)—a purported hedge fund allegedly turned Ponzi-scheme ran by Brenda Smith (“Smith”).  The defendant served as the clearing broker for Broad Reach, maintained several accounts on behalf of Broad Reach, and allowed many transfers from the Broad Reach accounts to other accounts controlled by Smith, both internally and externally.


Continue Reading New Complaint – Surefire Dividend Capital, LP v. Industrial and Commercial Bank of China Financial Services LLC

Trinh Ngoc Pham v. The Church for the Healthy Self, A/K/A CHS Trust, et al. is a putative class action filed in the Superior Court of California seeking damages related to a church-based investment scheme propped up by Ponzi-type payments.

Plaintiff is an individual who invested into the defendants’ church under the impression that the

In a recent decision in Anderjaska v. Bank of America, N.A., et al., the Southern District of New York decided that three national banks were not subject to general jurisdiction in New York for allegedly aiding and abetting a Ponzi scheme.

Anderjaska highlights the utility of procedural mechanisms when defending against Ponzi-related allegations in a forum where a bank neither has its principal place of business nor its place of incorporation.  Such procedural tools should not be overlooked as a means to defend litigation.


Continue Reading Personal Jurisdiction – An Effective Defense As Illustrated by the Southern District of New York in Dismissing Ponzi Litigation