Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Tuesday, June 16, 2009

SEC Charges Convicted Felon with Running a Ponzi Scheme

I frankly have become bored with the SEC's recent proliferation of enforcement actions against ponzi schemes, but here is an interesting one:

The SEC announced that on June 15, 2009, it filed an emergency civil action in the United States District Court for the Northern District of Illinois against David J. Hernandez, also doing business as “NextStep Financial Services, Inc.,” for conducting a Ponzi scheme which raised more than $11 million from investors in at least 12 states with false promises that their investments would earn guaranteed returns of 10% to16% per month with no risks. The SEC’s complaint alleges that between at least February 2008 and the present, Hernandez, a convicted felon, solicited investors to purchase “guaranteed investment contracts” by making false and misleading statements about his background, the existence of the company that issued the investments, the uses of investor proceeds and the safety of the investments. The complaint alleges that Hernandez sold the “guaranteed investment contracts” in person and through NextStep Financial’s website and claimed that he had an extensive background in banking and business, including having business and law degrees, and that NextStep Financial was a successful company that invested in payday advance stores. The complaint further alleges that Hernandez told investors that their investments were safe because they were covered by insurance. According to the complaint, however, none of this was true; indeed, his “banking experience” included a prior federal conviction for wire fraud.

The SEC’s complaint charges Hernandez with multiple securities violations and seeks injunctive relief, disgorgement plus prejudgment interest and civil penalties against Hernandez. The SEC also seeks to recover assets from several relief defendants.

http://lawprofessors.typepad.com/securities/2009/06/sec-charges-convicted-felon-with-running-a-ponzi-scheme.html

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Comments

For the folks in Illinois and the other 11 states that lost money in this Ponzi scheme to Hernandez and his NextStep Financial scam, I invite you all to take the "next step" to get your money back by partnering with my Investor's Fraud Recovery operation (the Fraud Squad). We have a team of lawyers and accountants that employ completely legal methods to recover money for you that was lost in fraudulent investing schemes. Call now before any more time passes to 1-800-808-4401 or log onto www.unscam.vpweb.com for more information. The clock is ticking. Don't waste another day. It could work against you.

Posted by: Unscammer | Jun 17, 2009 1:18:53 PM

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