Gryphon’s Investment Research Scam halted after fooling investors out of $17.5 million

April 28th, 2010
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The SEC has filed charges against Gryphon Holdings, Inc., its owner Kenneth E. Marsh and four associates with the operation of an Internet-based scam that lured investors into paying for fabricated stock market advice and investment tips from nonexistent “experts.” According to the SEC’s press release, the scam “induced investors to pay fees of up to $250,000 for securities recommendations that they falsely claim are based on sound research and successful strategies of trading experts with superior knowledge.” Gryphon Holdings and its associates obtained $17.5 million over three years due to its “numerous material misrepresentations and omissions since at least 2007 to entice unsuspecting clients to purchase its services.”

Gryphon Holdings publishes financial information, posting financial tricks and investment tips on the Internet under a variety of names, including “Wolves of Wall Street,” “Wall Street’s Most Wanted,” “Pure Profit,” and “Mafia Trader.” The SEC alleges that these recommendations and expert tips were little more than a “vehicle to attract unsuspecting clients to pay fees for personalized investment recommendations, portfolio analysis, and money management services that Gryphon purportedly provided.” Investors, following the advice of these so-called “experts” at Gryphon Holding who were depicted as possessing “millions of dollars in trading riches as well as top-notch educational backgrounds and prominent experience at major Wall Street firms,” suffered significant losses. In at least once instance, an investor allowed Gryphon to conduct trades on their behalf.

To increase the scam’s legitimacy, Gryphon also manufactured “glowing testimonials from George Soros and purported clients who profited by trading securities the firm recommended.” These endorsements, fabricated numbers and phony tips and advice were all used to induce clients to pay for personal recommendations, investment services and stock market advice.

In addition to owner Kenneth E. Marsh, the SEC has also charged Gryphon associates Baldwin Anderson, Robert Anthony Budion, Jeanne Lada, and James Levier.
For Detailed Investor Profiles on these Investors, click below:
Soros Fund Management
Related People: George Soros; Jeff Eberwein; Keith Anderson*; Robert Donald; Robert Soros; Scott Bessent; Zameer Arora
Related Entities: Pharos Financial Group (seeded) ; Quantum Emerging Growth Fund; Quantum Fund; Quantum Group of Funds; Soros Capital LP; Soros European Equity Fund; Soros Quantum Endowment Fund
Related Article Tags: Hedge Fund Fraud and Ponzi Scheme News


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