Securities Law Prof Blog

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

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Monday, August 29, 2011

SEC Charges Two Floridians with Running Ponzi Scheme Directed at Teachers and Retirees

The SEC charged two Florida men, John Davis Risher and Daniel Joseph Sebastian, with operating a Ponzi scheme that fraudulently raised approximately $22 million from more than 100 investors, many of whom were Florida teachers or retirees.   According to the SEC’s complaint, Risher and Sebastian marketed the fund under the names Safe Harbor Private Equity Fund, Managed Capital Fund, and Preservation of Principal Fund. They described themselves in fund offering documents as “two unique individuals” who used their expertise to “create an investment vehicle that would allow investors to capitalize from both bull and bear markets.”  Risher boasted to investors that he had substantial experience in trading equities and providing wealth and asset management services. In reality, Risher had a lengthy criminal history, spending 11 of the last 21 years in jail.

The SEC seeks permanent injunctions, disgorgement, and financial penalties against Risher and Sebastian.  The U.S. Attorney’s Office for the Middle District of Florida, which conducted a parallel investigation of this matter, has filed criminal charges against Risher.

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