Reed Slatkin Fraud Case
For my fraud case study, I chose to do it over Reed Slatkin for investment fraud. He was considered to be the perpetrator of the largest Ponzi scheme in the United States since that conducted by Charles Ponzi himself. Slatkin was born in Detroit, MI and was an initial investor and co-founder of EarthLink. Slatkin was also an ordained Scientology minister and long time supporter of the group, as were many of his victims. Reed Slatkin acted as an investment advisor for over 15 yearsin stock trading and money management. He actually ran the company from his garage in his former home in Santa Barbara, California. During the 15 plus years, he invested millions and millions of dollars in behalf of hundreds of investors.
In the latter part of 1999, Mr. Slatkin was actually investigated by the Securities and Exchange Commission(SEC). Mr. Slatkin was actually in the process of liquidating a lot of his investments made in behalf by his investors. In reality, Mr. Slatkin solicited millions of dollars from investors a contradiction of a statementmade to the SEC. During this time period, many investors wanted returns of funds, but were met with lack of response from Mr. Slatkin. Some of the investors brought lawsuits to recover their investments and others threatened to file involuntary bankruptcy petitions against him, forcing him into bankruptcy. Mr. Slatkin stated to both the investors and SEC that there were ample funds to return all investors monies. He led everyone to believe that it was the European authorities that were holding up the return of the investments.
Mr. Slatkin filed bankruptcy in May 2001 and at the same time the U.S. Securities and Exchange Commissionshut down Slatkins scheme by filing an enforcement action and obtaining a temporary restraining order freezing his remaining assets. The same day the FBI received search warrants relating to Slatkin. He was accused of defrauding investors out of nearly $600 million. He was also…