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Wall Street Roundup

SEC cracks down on retiree scams

September 06, 2007|From Times Wire Services

The Securities and Exchange Commission, cracking down on scams targeting retirees, sued 26 people and companies Wednesday for their roles in an alleged $428-million fraud involving Mexican time-share rentals.

The ring duped thousands of people by promising stable income from time shares in Cancun, the SEC said in the lawsuit filed in federal court in Chicago.

Operators instead used money from new clients to make purported rental payments to earlier investors, leaving victims with more than $310 million in losses when the system collapsed, the agency alleged.

U.S. regulators are stepping up efforts to protect retirees as their share of U.S. wealth makes them "prime targets for scam artists and securities swindlers," SEC Chairman Christopher Cox told a Senate committee.

Separately, the SEC fined a Pittsburgh pension consultant and its president $215,000, marking the first penalties from increased scrutiny of potential conflicts of interest among firms that help retirement funds pick money managers.

Yanni Partners Inc., which advises pensions overseeing $12 billion in assets, will pay $175,000 and Theresa Scotti will pay $40,000, the SEC said.

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