SECURITIES FRAUD
 What
is a security?
The definition of a security encompasses many
things; generally, a security includes stocks,
bonds, commodities and other investments.
What is securities fraud?
Securities fraud can be described as deceptive
practices in the stock and commodity markets.
Generally, securities fraud occurs when investors
are enticed to part with their money based on untrue
statements. Securities Fraud is illegal.
Examples of securities fraud:
A)
Providing false information on a company financial
statement.
B) Providing false information on Securities and
Exchange Commission (SEC) filings.
C) Lying to the company auditors.
D) Insider trading.
E) Stock manipulation schemes.
F) Broker embezzlements.
 Who
may be involved in securities fraud?
Securities fraud may be committed by, among others,
investors, employees of a brokerage houses,
corporate executives or their shareholders, or by
other market participants.
What can I do to assist in combating securities
fraud?
Securities Fraud destroys our confidence in the
securities and investments markets and casts doubt
over investments into legitimate companies.
Therefore, it is very important to identify and
report these crimes.
Common
Scams—Be on the Lookout for Fraud
High Yield Investment Frauds
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Characterized by promises of
high rates of return with little or no risk.
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May involve various forms of
investments (e.g. securities, commodities, real
estate, precious metals, etc.)
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"Too good to be true” investment
opportunities.
-
Perpetrators may contact victims
by telephone, e-mail, or in person.
-
The offers are generally
unsolicited.
 Ponzi & Pyramid Schemes
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Use money collected from new
victims to pay the high rates of return promised
to earlier investors.
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Payouts give the impression of a
legitimate, money-making enterprise behind the
fraudster's story.
-
In reality, investors are the
only source of funding.
Advance Fee Schemes
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Victims advance relatively small
sums of money in the hope of realizing much
larger gains.
-
Gains never materialize because
there is no legitimate underlying investment.
-
To participate a particular
investment opportunity, victims must first send
funds to cover “taxes” or “processing fees.”
-
After victims send the “fees,”
the perpetrators appropriate the funds and never
deliver on the investment.
Source:
http://www.fbi.gov/publications/fraud/securities_fraud.htm
How to Avoid Internet Investment
Scams
The Internet serves as an excellent
tool for investors, allowing them to easily and
inexpensively research investment opportunities. But
the Internet is also an excellent tool for
fraudsters. That's why you should always think twice
before you invest your money in any
opportunity you learn about through the Internet.
This alert tells you how to spot
different types of Internet fraud, what the SEC is
doing to fight Internet investment scams, and how to
use the Internet to invest wisely.
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TRAINING
Association of Certified Fraud Examiners
Advanced Fraud Examination Techniques
Austin, Texas
October 1-3, 2007
Tampa Bay Chapter
October 16, 2007
"Securities Fraud"
Bruce W. Barnes, P.A.
January 8, 2008
"Computer-Aided Fraud
Examination"
Gary Cook, Ph.D, Florida Southern University
February 12, 2008
"Ballistics Imaging Investigation"
Cresha Cason, Forensic Technology
March 11, 2008
"Vending Gender and the Race to Defraud: Supplier Diversity Fraud"
Alison Jimenez, President, Tanjeble Inc.
April 8, 2008
T.B.A.
T.B.A.
9th Annual Fraud & Computer Crimes Seminar
May 6-7, 2008
Ruth Eckerd Hall
Clearwater, Florida
1111 McMullen Booth Road
Clearwater, FL 33759
2006 - 2007
OFFICERS &
DIRECTORS
PRESIDENT
Christine Dever, CPA, CFE
Accountabilties Consulting Services
(813) 417-1825
VICE PRESIDENT
Steve Hooper, CIA, CFE, CCSA
Clerk of the Circuit Court Hillsborough County, FL
(813) 276-2029 x3703
SECRETARY
Clark J. Bolton, CFE
WellCare Health Plans, Inc.
(813) 290-6200 x5128
TREASURER
Laura Krueger Brock, CPA, CFE
Kirkland, Russ, Murphy & Tapp, P.A.
(727) 572-1400
DIRECTOR
Mark Dubina,
CFE
Florida Department of
Law Enforcement
(813) 878-7366
DIRECTOR
Ellen Wilcox, CFE
Florida Department of
Law Enforcement
(727) 298-2482
DIRECTOR
Gary Chapman, CFE, CGAP
City of Tampa, Internal Audit
(813) 274-7163
CHAPTER TRAINING
Wayne Boytim, CFE
City of Tampa,
Internal Audit
(813) 274-7167 |
Navigating the Frontier: Where the Frauds Are
The Internet allows individuals or companies to
communicate with a large audience without spending a lot of
time, effort, or money. Anyone can reach tens of thousands of
people by building an Internet web site, posting a message on an
online bulletin board, entering a discussion in a live "chat"
room, or sending mass e-mails. It's easy for fraudsters to make
their messages look real and credible. But it's nearly
impossible for investors to tell the difference between fact and
fiction.
Online Investment Newsletters
Hundreds of online investment newsletters have
appeared on the Internet in recent years. Many offer investors
seemingly unbiased information free of charge about featured
companies or recommending "stock picks of the month." While
legitimate online newsletters can help investors gather valuable
information, some online newsletters are tools for fraud.
Some companies pay the people who write online
newsletters cash or securities to "tout" or recommend their
stocks. While this isn't illegal, the federal securities laws
require the newsletters to disclose who paid them, the amount,
and the type of payment. But many fraudsters fail to do so.
Instead, they'll lie about the payments they received, their
independence, their so-called research, and their track records.
Their newsletters masquerade as sources of unbiased information,
when in fact they stand to profit handsomely if they convince
investors to buy or sell particular stocks.
Some online newsletters falsely claim to
independently research the stocks they profile. Others spread
false information or promote worthless stocks. The most
notorious sometimes "scalp" the stocks they hype, driving up the
price of the stock with their baseless recommendations and then
selling their own holdings at high prices and high profits. To
learn how to separate the good from the bad, read our
tips for checking out newsletters.
Bulletin Boards
Online bulletin boards – whether newsgroups,
usenet, or web-based bulletin boards – have become an
increasingly popular forum for investors to share information.
Bulletin boards typically feature "threads" made up of numerous
messages on various investment opportunities.
While some messages may be true, many turn out
to be bogus – or even scams. Fraudsters often pump up a company
or pretend to reveal "inside" information about upcoming
announcements, new products, or lucrative contracts.
Also, you never know for certain who you're
dealing with – or whether they're credible – because many
bulletin boards allow users to hide their identity behind
multiple aliases. People claiming to be unbiased observers
who've carefully researched the company may actually be company
insiders, large shareholders, or paid promoters. A single person
can easily create the illusion of widespread interest in a
small, thinly-traded stock by posting a series of messages under
various aliases.
E-mail Spams
Because "spam" – junk e-mail – is so cheap and
easy to create, fraudsters increasingly use it to find investors
for bogus investment schemes or to spread false information
about a company. Spam allows the unscrupulous to target many
more potential investors than cold calling or mass mailing.
Using a bulk e-mail program, spammers can send personalized
messages to thousands and even millions of Internet users at a
time.
Source:
http://www.sec.gov/investor/pubs/cyberfraud.htm
News from the ACFE
Gain important fraud-fighting
knowledge and learn best-practices from your own office or home
computer by participating in our newest learning opportunity for
anti-fraud professionals: ACFE Online Learning. ACFE Online
Learning courses offer you a convenient way to enhance your
anti-fraud skills!
Organized Retail Crime
October 25, 2007 at 2:00 PM EDT
Duration: 100 minutes
CPE: 2 hours
This webinar will provide a broad overview and insight into the
growing trend of Organized Retail Crime (ORC). This will prepare
you to identify when your business has become a target of ORC
and provide information on groups you can join to more
effectively address them.
WHO SHOULD ATTEND
• Certified Fraud Examiners and other anti-fraud specialists
• Law Enforcement
• Loss prevention and security professionals
• Forensic accountants
• Internal and independent auditors
• Business managers and professionals assuming fraud deterrence
or investigation responsibilities
WHAT YOU WILL LEARN
• What is Organized Retail Crime
• Attributes of Organized retail Crime
• Cost of Organized Retail Crime
• Categories of Organized Retail Crime
Speaker:
Sharon Curry, CFE
Director of Corporate Fraud Investigations
Wal-Mart Stores, Inc
*Register by October 11, 2007 to receive the Early Bird
Registration discount!
For more
information:
http://webinars.acfe.com/session.php?id=897 |
Chapter News
The
University of Tampa's Center for Ethics honored Freddie Solomon with the
2007 Tampa Bay Ethics Award. This award
celebrates integrity, virtue and character by recognizing
outstanding individuals in business, professional services
or government who exemplify moral qualities and the
highest standards in their daily activities.
Freddie Solomon grew up in Sumter, South Carolina and came to
Tampa to attend the University of Tampa on a football
scholarship. While playing football at the University of Tampa,
Freddie received national recognition as the team's quarterback.
After graduation, he was drafted by the Miami Dolphins and
played with them until 1978. In 1978, Freddie was traded to the
San Francisco 49ers and played there until the end of the 1985
season. After an exemplary career in
the National Football league, Freddie returned to Tampa where he
became involved in fund raising events for non-profit
organizations. In 1991, Freddie joined the Hillsborough County
Sheriff's Office. In his role in the Sheriff's Office, he
teaches responsibility and accountability to area youth. Through
his work and fundraising activities, Freddie has had a positive
impact on thousands of youth in the Tampa Bay area. |
Dinner Meeting News
Our
next Dinner Meeting is scheduled for October 16th
Bruce Barnes will be presenting "Securities Fraud" at our
next dinner meeting. Bruce grew up in St. Petersburg and
then attended the University of Florida, where he graduated
with a degree in Business Administration in 1980. After
graduating from UF, he became employed by Barnett Bank of
Central Florida. He left the bank in 1982 to attend law
school at Stetson University College of Law. He received his
juris doctorate in 1985.
Bruce has been practicing law since 1985, primarily in the
area of litigation. In 1991, he joined the law firm of
Johnson, Blakely, Pope, Bokor, Ruppel & Burns, P.A., and it
was at that time that he began focusing his practice on
litigation and arbitration relating to customer complaints
against securities brokerage firms. He also was an in-house
attorney with Raymond James Financial, Inc. Bruce started
his own law firm at the beginning of 2001, and his office is
located in Clearwater. He continues to practice primarily in
the area of stockbroker litigation.
The dinner meeting will be held at the Westshore
Hotel, located at 1200 N. Westshore Blvd.
in the Hyde Park Room (first floor). The hotel
is just north of I-275 and Cypress Avenue on the east side of
Westshore (map). Evenings will begin with a social at 6:00 P.M.,
followed by a buffet dinner at 6:30 and a presentation at 7:00. The
cost is $20, payable at the door.
To make your reservation, please use the following link
Chapter
Meeting Reservation and complete the form at the bottom of
the page. You can also make your reservation by emailing
Wayne
Boytim or calling him at (813) 274-7167 by the Friday before the
meeting date. Reservations will be accepted after that date and
walk-ups are always welcome. Please remember that cancellations are
accepted up to the afternoon of the meeting. No shows will be billed
after the second missed meeting. Please help us keep our costs down
by letting us know if you are unable to attend.
September 11th Dinner Meeting
Michael J. Kotch, CFE, and Clark J. Bolton, CFE,
presented "Best
Practices versus Challenges for a Corporate Health-Care
Special Investigation Unit (SIU)." Mike is the Director,
Corporate SIU for WellCare Health Plans. He is a Certified
Fraud Examiner and a Certified
Compliance Professional. Mike has over 20 years experience
and was a criminal investigator with the US Army. Clark is
the Supervisor of Investigations/SIU for WellCare Health
Plans. He is a Certified
Fraud Examiner
and the current
Secretary of ACFE Tampa Chapter. He has 16
years of criminal, civil and regulatory investigative and
managerial experience in public & private sector
and 9
years experience dedicated to P/C & Health Care insurance
fraud investigations. Mike opened the
presentation by describing the relationships between Members,
Government Agencies, Provider Networks, and Managed Care
Organizations. He gave us an overview of WellCare Health Plans
and described their Special Investigations Unit. Clark described
healthcare fraud and gave examples of provider and member fraud.
He described some best practices in SIU operations and the
investigative process. To have a successful investigation,
experts in investigations, data mining and statistics, medical
coding, and litigation are often needed. Clark described each of
these specialties and how their knowledge is used during the
investigation. He wrapped up by citing the challenges facing
SIUs: staffing, resources, lack of adequate fraud and litigation
experience, and the lack of accepted established guidelines. |
INVESTigate Before You INVEST!
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Download and print a hard copy
of any on-line solicitation that you are
considering. Make sure you catch the Internet
address (URL) and note the date and time that
you saw the offer. Save this in case you need it
later.
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Don't assume that people on-line
are who they claim they are. The investment that
sounds so good may be a figment of their
imagination, or they may be paid to promote it.
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Ask the on-line promoter whether
– and how much – they've been paid to tout the
opportunity.
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Ask the on-line promoter where
the company is incorporated. Call that state's
secretary of state and ask if the company is
incorporated with them and has a current annual
report on file. Also, check the SEC's
EDGAR
database.
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Don't believe everything you
read on-line. Take the time to investigate a
possible investment opportunity before you hand
over your hard-earned money.
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Check with your
state securities regulator or the SEC and
ask if they have received any complaints about
the company, its managers, or the promoter.
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Ask for other sources of
information at your local public library. For
example, there are resources that provide
information about the company, such as a payment
analysis, credit report, lawsuits, liens, or
judgments.
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Before you invest, always obtain
written financial information, such as a
prospectus, annual report, offering circular,
and financial statements. Compare the written
information to what you've read on-line and
watch out if you're told that no information is
available.
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Don't assume that your access
provider or on-line service has approved or even
screened the investment. Anyone can set up a web
site or advertise on-line, often without any
check of its legitimacy or truthfulness.
-
Check with a trusted financial
advisor, your broker, or attorney about any
investment you learn about on-line.
Have You Run Into A Problem?
Don't be embarrassed if you think
you've been duped – you are not alone. Complain
promptly. By complaining early you will have a
better chance of getting your money back, protecting
your legal rights, preventing others from losing
money, and assisting securities regulators in
stopping investment fraud.
Source:
http://www.sec.gov/investor/pubs/cyberfraud/investigate.htm
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President's Message
Our first dinner meeting went very well. Thank
you Mike Kotch and Clark Bolton for an insightful presentation
on the Special Investigations Unit at Wellcare and the
challenges we all face fighting healthcare fraud.
Our meeting schedule is starting to fill up. The last of the
slots should be filled within the next week or so. We have begun
to solidify speakers for our annual seminar in May and it will
prove to be another excellent presentation. This year’s seminar
will focus more on more computer issues than last year. Even
though our sections are starting to fill in for speakers we are
always looking for good speakers on topics you are interested.
Please fill out the surveys at the dinner meetings and email us
with your ideas, suggestions, and contacts.
As we mentioned at the dinner meeting and in our last
newsletter, one of our main goals is to apply for Chapter of the
Year. We have many active members that provide services such as
training, speaking, or just mentoring on a daily basis. We need
to hear from you. We add this information to our application as
well as keep it on file. I receive calls weekly requesting
assistance for training or project leads and try to pass them on
to the appropriate members. The more information you provide to
us about your skills and activities the more we can provide
service to the community and assist you as members.
We are looking for volunteers in the business community to work
with Clark and myself to help develop the student board and
mentoring program. For those of you who provide internships this
would be a win-win situation to find and develop talented,
educated individuals. We can schedule a lunch meeting to
discuss, so please email or call us if you are interested.
Everyone is busy, we understand, however, if every one
participates on some level it multiplies. Please get involved in
what ever way you can.
Our website has all of our dates and specifics, please be sure
to visit it. Gary works very hard to keep it up to date with
current fraud topics as well as general Chapter information.
We look forward to seeing you at the meeting October 16th! Until
then best wishes!
Christine A. Dever, CPA, CFE
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