The pitch on LinkedIn seemed too good to be true: Act now to buy pre-IPO shares of Facebook, Groupon, Twitter, Zynga and other hot companies about to go public, according to politico
And indeed that’s exactly what the Securities and Exchange Commission found: The ads were part of an elaborate scheme carried out by a fake hedge fund that cheated investors out of more than $12 million and financed the perpetrator’s “lifestyle of private jets, luxury cars and fine art,” the Securities and Exchange Commission alleged Thursday. Over 15 months, the so-called Praetorian Global Fund claimed it owned shares in numerous private companies and used companies such as Spartan Capital, an unregistered broker/dealer, to entice investors to buy shares in private that are virtually impossible to purchase.
One ad read — “We have access to Fisker Auto, Groupon, Ren Ren, Bloom Energy and many more! Unlike most of the other investment banking firms, we let you sell your shares right at the open! You also do not need to be in NY to invest in our IPOs!”
But investors’ money did not buy shares of the private companies or go to an escrow account, as investors were promised, according to the filing. Instead, the money went to the private accounts of the hedge fund owner….
Find out more at http://www.politico.com/news/stories/1111/68618.html
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