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May 13, 2008 - The Michigan Office of Financial and Insurance Regulation (OFIR) recently aided the Securities and Exchange Commission (SEC) in an investigation to stop an Internet scheme that fraudulently acquired $72 million from 3,000 investors. The SEC obtained an emergency court order freezing the assets of Gregory N. McKnight of Swartz, Creek, MI, the alleged perpetrator of the scheme.
The SEC reports that the perpetrator and his company sold unregistered securities through a Web site and promised he would invest the proceeds in foreign currencies, commodity futures, stocks and real estate. McKnight invested only less than half of the money he raised on behalf of investors.
“OFIR’s examiners and investigators played an integral role in the SEC’s halting of $72 million in this alleged Internet fraud scheme,” said OFIR Commissioner Ken Ross in a May 13 agency press release. “Protecting consumers from scammers remains a top priority for OFIR.”
The investments suffered substantial losses and nearly $30 million was allegedly used in unauthorized personal expenditures and dispersed in an illegal Ponzi scheme. The activity took place between 2005 and 2007 and involved investors in all 50 states and at least 30 foreign countries.
To read more, follow this link to the OFIR’s Web site.
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