New York Investment Advisor found Guilty of Operating Ponzi Scheme
A Manhattan investment advisor has been found guilty of operating an $11 million Ponzi scheme. Hayim Regensberg was found guilty of securities and wire fraud charges, and faces up to 20 years in prison.
According to federal prosecutors, Regensberg used his investors' money to run a classic Ponzi scheme - paying off older investors with newer investors' money. Prosecutors were able to prove that Regensberg solicited investments by telling investors their funds would be invested either in foreign initial public offerings that offered returns between 5 and 15 percent, or in trading firms that would give annual returns up to 18 percent. Both investment methods, Regensberg assured investors, were extremely low risk. 
Needless to say, the investments went neither into initial public offerings or trading firms. Instead, Regensberg invested in speculative investments, losing large portions of investor money in the process. Large sums of money also found their way into the hands of his relatives.
When suspicious investors demanded to know where their money was Regensberg furnished a forged bank statement showing a bank balance of $9 million in investment funds. The account actually contained the grand sum of $9,000. Overall, investors lost more than $11 million in Regensberg's Ponzi scheme.
Investment Fraud Lawyers
One of an investment advisor's duties is to inform his clients about the risks of investments. Advisors must be aware of the risks of a scheme and must be upfront about them. The investor must be comfortable with the risk factor and all investments must be made using the same methods the advisor describes. Investments must also be appropriate to the objectives of the investor, as well as his financial condition. Failure to do so can make the investment advisor liable for investment fraud.
If you have suffered losses in a Ponzi scheme, an investment fraud lawyer can help you begin the process of recovering your money. Contact a securities attorney at Arnold & Itkin LLP to discuss your options for compensation.
