SEC Charges Foreign Investors with Bogus Scheme

July 27th, 2009
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The SEC has charged Kuwaiti investor Hazem Khalid al-Braikan and his three supporting entities with illegal activity, causing $5 million in their assets to be frozen. These entities include United Gulf Bank, KIMCO Asset Management Company, and Al-Raya Investment Company. They are accused of trading around bogus offers to acquire US companies, including Harman International Industries (NYSE: HAR) and Textron Inc (NYSE: TXT).

Fake news stories about upcoming tender offers and acquisitions would circulate through the media first. Then, Mr. al-Braikan and his partners would load up on shares of the company that was to be “acquired” (although this would turn out to be false) and sell the shares at the artificially inflated price to reap a profit. The SEC’s investigation is still ongoing.
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Related Article Tags: Hedge Fund Fraud and Ponzi Scheme News


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