The U.S. Stocks & Exchange Commission has accused a Scotts Valley finance expert of running a $60 million investment fraud that reported false gains to stockholders and the IRS while paying dividends in the manner of a Ponzi schemes .
According to a suit filed May 24 by the SEC, John A. Geringer, 47, the executive of Scotts Valley-based GLR Expansion Fund, raised more than $60 million since 2005, typically from financiers in the Santa Cruz County area.
Geringer who also controlled GLR Capital Management, GLR Consultants and Geringer, Luck & Rode with two business partners who weren't named in the suit is accused of using fake and misleading promoting materials that attracted financiers into believing that the investment fund was earning returns of 17 to 25 percent each year beginning in 2001.
According to the SEC, the selling materials claimed that the fund was tied to stock indices such as the S&P 500, Nasdaq and Dow Jones along with oil-, natural gas- and technology-related firms.
The SEC claims that, as an alternative Geringer solidly made losses while trading in stocks, and that GLR Expansion Fund lost money from 2005 until it stopped trading in public traded securities in 2009. From mid-2009 to December 2011, Geringer invested at least $29 million in 2 personal start-up corporations.
When some investors withdrew their investments, Geringer reportedly paid them profits based on fake gains with money he got from other stockholders a practice looking a little like a Ponzi scheme, according to the SEC.
Geringer painted the picture of a successful fund weathering Americas finance disaster thru a diversified, conservative investment technique, recounted Marc Fagel, the director of the SECs San Francisco office, in a prepared statement. The reality , however , was the exact opposite. Geringer lost millions of dollars in the market, tied up remaining investor funds in a couple of illiquid corporations, and lied about it in false account statements.
The SEC reports that the majority of the $60 million Geringer took in was invested in 2 technology start-ups; used to pay other investors; or turned over to three businesses controlled by Geringer.
Through 2005 to 2011, he created false paperwork saying gains, the SEC claims.
The SEC complaint also alleges that Geringer and the three companies he controlled continually violated the Exchange Act and Counsels Act by lying to speculators, saying financial statements had been audited and violating anti-fraud provisions in the laws, among other charges.
All accounts related to Geringers companies have been frozen, and the SEC has requested that all funds be surrendered with interest and pay civil penalties related to the charges. An SEC speaker declined to state the number of financiers, how much remains in the fund, or how the fraud was exposed.
The case, which was filed May 24, will be heard in the San Jose Division of the U. S. District Court, North District of California.
Geringer has 21 days from May 24 to retort to the complaint.
The SEC stated that an inquiry is still continuing and thanked the U.S. Attorneys Office, Fed. Bureau of Investigation and FINRA for their assistance.
Geringers Scotts Valley Drive office was closed this week.
Geringer was called through an acquaintance and remained silent at this time.
Read more: Press-Banner - Local financier under federal suspicion.
According to a suit filed May 24 by the SEC, John A. Geringer, 47, the executive of Scotts Valley-based GLR Expansion Fund, raised more than $60 million since 2005, typically from financiers in the Santa Cruz County area.
Geringer who also controlled GLR Capital Management, GLR Consultants and Geringer, Luck & Rode with two business partners who weren't named in the suit is accused of using fake and misleading promoting materials that attracted financiers into believing that the investment fund was earning returns of 17 to 25 percent each year beginning in 2001.
According to the SEC, the selling materials claimed that the fund was tied to stock indices such as the S&P 500, Nasdaq and Dow Jones along with oil-, natural gas- and technology-related firms.
The SEC claims that, as an alternative Geringer solidly made losses while trading in stocks, and that GLR Expansion Fund lost money from 2005 until it stopped trading in public traded securities in 2009. From mid-2009 to December 2011, Geringer invested at least $29 million in 2 personal start-up corporations.
When some investors withdrew their investments, Geringer reportedly paid them profits based on fake gains with money he got from other stockholders a practice looking a little like a Ponzi scheme, according to the SEC.
Geringer painted the picture of a successful fund weathering Americas finance disaster thru a diversified, conservative investment technique, recounted Marc Fagel, the director of the SECs San Francisco office, in a prepared statement. The reality , however , was the exact opposite. Geringer lost millions of dollars in the market, tied up remaining investor funds in a couple of illiquid corporations, and lied about it in false account statements.
The SEC reports that the majority of the $60 million Geringer took in was invested in 2 technology start-ups; used to pay other investors; or turned over to three businesses controlled by Geringer.
Through 2005 to 2011, he created false paperwork saying gains, the SEC claims.
The SEC complaint also alleges that Geringer and the three companies he controlled continually violated the Exchange Act and Counsels Act by lying to speculators, saying financial statements had been audited and violating anti-fraud provisions in the laws, among other charges.
All accounts related to Geringers companies have been frozen, and the SEC has requested that all funds be surrendered with interest and pay civil penalties related to the charges. An SEC speaker declined to state the number of financiers, how much remains in the fund, or how the fraud was exposed.
The case, which was filed May 24, will be heard in the San Jose Division of the U. S. District Court, North District of California.
Geringer has 21 days from May 24 to retort to the complaint.
The SEC stated that an inquiry is still continuing and thanked the U.S. Attorneys Office, Fed. Bureau of Investigation and FINRA for their assistance.
Geringers Scotts Valley Drive office was closed this week.
Geringer was called through an acquaintance and remained silent at this time.
Read more: Press-Banner - Local financier under federal suspicion.
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