Adviser invented $1B clients to lure investors: SEC

[RedEarth]

Source: InvestmentNews

Locke Capital Management Inc. and its chief executive, Leila Jenkins, lied repeatedly to customers by inventing clients who supposedly lived in Switzerland and had more than $1 billion in assets, the Securities and Exchange Commission charged today.

Ms. Jenkins, CEO, president and chief investment officer of the Newport, R.I.-based investment advisory firm, invented a “massive” phony customers in order to land real clients, the SEC said in a complaint filed in the U.S. District Court for the District of Rhode Island. In addition, she lied to SEC staff about the existence of the invented client and furnished the agency with bogus documents, including fake account statements, the agency said.

Ms. Jenkins maintains residences in Newport and Palm Beach, Fla., the SEC said. International securities officials assisted the SEC in making the case, including the U.K. Financial Services Authority, the Swiss Financial Market Supervisory Authority and Spain’s Comisión Nacional del Mercado de Valores.

The fraud was conducted from at least 2003 to 2009, the SEC said. Ms. Jenkins and Locke, which listed $1.3 billion in assets on an ADV disclosure form dated Feb. 2008, also misrepresented the performance of the advisory firm for years, according to the SEC’s release.



Read more: http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20090309/REG/903099978

[TwilightGardener]

1. It's amazing, watching the fraud being uncovered almost daily now--

the lights are finally on, the cockroaches are scurrying...

[Blaze Diem]

2. K & R Will be interesting to see just what happens to people like these two.

Should be prison.
But I'm betting something much milder. As usual.
And like Madoff, they will be treated much kinder than the average American.

Makes me sick.

[originalpckelly]

3. "invented a 'massive' phony customers in order to land real clients"

Who published this without finding such a simple error?

Take the 'a' out and it works, or take off the 's' on "customers" to fix it.

[Journeyman]

4. Well, good thing to learn after the pasture gate's been open for years and the cow's gone. . .

There's only one pertinent question here:

Why wasn't the SEC doing its job in 2003?

That's the meat. Everything else is commentary.

[wackywaggin]

5. An important question indeed!!

These scandals prove that the Bush Regime had a clear disregard for any regulatory rules that govern this country. Furthermore, the economio collapse we now face lies clearly on the shoulders of the failure of the Bush administration to abide by any rule of law....How does this woman walk the streets without a team of security guards for protection?

[JerseygirlCT]

6. Yup, once again the SEC has completely flubbed its job

Which isn't to announce problems after they've been discovered. It's to discover them. They seem to have missed that for the past oh, 8 years at least.

[Hassin Bin Sober]

7. Oh Lordy! Not Ms. Jenkins!

[Deny and Shred]

8. Fraud can't get this commonplace unless they (financiers) know ...

...the SEC isn't investigating.
When they couldn't deregulate outright (eliminate the SEC), they starved the budget. Fraud is an obvious outcome. This level of it indicates how little they scared anyone.

On edit (financiers). Had to clean up my pronouns