Texas A&M Professor & Lawyer Caught in $19 Million Fraud

May 27th, 2009
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The Securities and Exchange Commission obtained a court order to freeze the assets of Texas-base PrivateFX Global One Ltd after charging the firm with defrauding investors. The firm’s principals, Robert D. Watson and Daniel J. Petroski, allegedly forged bank statements in order to make investors believe that the firm’s funds were earning spectacular returns. Mr. Watson resigned last month from Texas A&M, where he had been an Executive Professor of Finance at the Mays Business School. Houston resident, Mr. Petroski is both a lawyer and a certified public accountant.

According to yesterday’s press release, PrivateFX Global One allegedly raised more than $19 million from investors. Watson and Petroski told investors that they generated profits through their proprietary foreign-currency trading software program that they called “Alpha One.” The SEC press release said that the two allegedly “misrepresented to investors that it had millions of dollars in bank accounts in the U.S. and Switzerland and that their foreign exchange trading business had achieved an annual return of more than 23 percent since its inception and has never had a losing month. The SEC alleges that the defendants’ historical performance claims are not supported by valid financial records.”

Watson and Petroski are also accused of creating phony account statements and records for SEC investigators. These documents reportedly showed multi-million dollar balance and profits within accounts that do not even exist.

“The SEC’s complaint charges, among other things, that the defendants violated the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. In addition to emergency and interim relief that has been obtained, the SEC seeks a preliminary injunction and a final judgment permanently enjoining the defendants from future violations of the relevant provisions of the federal securities laws and ordering them to pay financial penalties and disgorgement of ill-gotten gains with prejudgment interest.”
For Detailed Investor Profiles on these Investors, click below:
PrivateFX Global One Ltd
Related People: Daniel J. Petroski; Robert D. Watson
Related Article Tags: Hedge Fund Fraud and Ponzi Scheme News

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