Remember Gryphon Financial? To recap, it was a scam run by a bunch of guys who called themselves Kenneth Marsh, Baldwin Anderson, Robert Anthony Budion, Jeanne Lada, 44 and James T. Levier. Those names won’t mean anything to the investors who got taken for a ride for more than $17.5 million, because the firm used fake names, claiming it was run by president “Michael Warren” and vice-president “Kenneth Maseka” (the latter fictional character’s pedigree included degrees from Harvard, Oxford, Columbia and Wharton and job with Lehman Brothers and Goldman Sachs). Other (awesome) facts about the firm that turned out to be untrue included:
* An office building “in the heart of the financial world at 110 Wall St., 11th Floor.” The actual office can be found at 3767 Victory Blvd., next to a martial arts school and a bakery.
* Props from George Soros, who is quoted as saying: “Alone, the Gryphon Financial are incredible, together they are unstoppable."
* A ten-man trading desk (which Gryphon’s newsletter describes as being key members of its “hardcore business”)
An alleged profile from the FT:
Financial Times Reports – this secret group has identified as the latest hedge fund to exploit the weakening sub prime markets – pounding stocks down to nothing and making billions along the way, one hedge fund run by this group had been rammed to see returns of over 1000% in 2007. Together we beat up hedge funds that are said to have realized over 20 million from one trade.
* Huge-ass returns: “One client, who shelled out $100,000, allegedly was told that a “similarly situated” investor earned a return of 1,600 percent. And Gryphon trumpeted that its investments were ‘up 1,324 percent in total compounding returns in the last 16 years,’ when in fact Gryphon was only formed in 2005.”
Anyway, 18 people have been charged in the alleged scam, with 17 pleading guilty, except for Anderson, whose lawyer had this to say in his opening statement today: “He never lied to anybody, he never intentionally misled anybody and he never tried to defraud anybody...What he thought he was selling was a legitimate product.”
‘Boiler Room’ Salesman Lied to Investors: U.S. [Bloomberg]