Remember Gryphon Financial? It was a boiler room scam run under a bunch of false names (including "Michael Warren" and "Kenneth Maseka," supposedly a Harvard and Oxford grad) by Kenneth Marsh, who’s going to be sentenced for securities fraud next week. Investors claim that Gryphon not only lied to them about an endorsement by George Soros (who the firm claims said “Alone, the Gryphon Financial are incredible, together they are unstoppable") but the opportunity to see mind-boggling returns. Except that those huge-ass returns turned out to be real! Sort of. Maybe. In any case, if you're having a tough time in the stock-picking business, you may want to talk to Marsh (pictured above) in, oh, about 14 years.
Kenneth Marsh, who pleaded guilty in April to charges he misled investors into paying fees for phony investment advice, should be sentenced leniently in part because he consistently helped clients turn profits, his lawyer said.
Marsh, 44, who ran Gryphon Holdings Inc. on Staten Island, New York, pleaded guilty April 14 to one count of securities fraud and is scheduled to be sentenced Aug. 11. He faces as long as 14 years in prison under federal guidelines, Assistant U.S. Attorney Roger Burlingame said at the plea hearing.
“Gryphon’s trade recommendations were generally more profitable than the market overall and often were considerably more profitable,” Alan S. Futerfas, Marsh’s lawyer, wrote in a court filing yesterday seeking leniency for his client.
The average return for Marsh’s buy option recommendations with a matching sell recommendation in 2009 was 167 percent and was profitable 100 percent of the time, Futerfas said, citing a report done for Marsh by Jerry DeNigris, president of Riverside Financial Group, an analysis firm in Cranford, New Jersey.
Buy recommendations for equities with matching sell recommendations in 2009 brought an average return of 76 percent during the same period the S&P 500 Index grew 14 percent, Futerfas said, citing the report.
Boiler-Room Convict Marsh’s Trades Typically Beat Market, Lawyer Says [Bloomberg, via Reformed Broker]