FTC Capital Markets Fraud Involving Hundreds of Millions of Dollars

[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]

May 20, 2009: Today U.S. investigators criminally charged FTC Capital Markets' Chairman Guillermo Clamens and Nazly Cucunuba Lopez with conspiracy, securities fraud and wire fraud possibly involving hundreds of millions of dollars. This was a result of a civil lawsuit filed in Manhattan federal court by Citgo Petroleum Corp [a subsidiary of PDVH, which is owned by Venezuelan state oil company PDVSA] and PDV Holding Inc in March 09, 2009 that accused FTC Capital Markets, several related entities and the two executives of fraud. They alleged that FTC executives Lopez and Clamens "diverted and misused" the plaintiffs' investment funds. These two executives were charged with creating a :

slush fund to finance self-interested, unauthorized and speculative trading in unregistered, risky, illiquid investments in which they had financial interests, the full extent of which remain unknown.

According to the criminal complaint dated May 18, Clamens, Lopez and others solicited money from investors between April 2008 and November 2008. They invested in high-risk securities without the knowledge of those investors, instead of in low-risk securities. Investors had entrusted hundreds of millions with the firm. The complaint said that Clamens and Lopez made undisclosed and unauthorized purchases into the Citgo account of $10 million worth of bonds issued by Venezuela. $19.3 million of Citgo's $100 million investment was diverted to "self-dealing, risky and unauthorized note and bond purchases."

You can follow the entire story in details at Market News from Reuters. These days it's difficult to know where to place our trust without getting ripped :(.

U.S. charges FTC Capital executives for fraud

Related Posts