Privacy, Business and Law

On October 15, the U.S. Securities and Exchange Commission filed suit and obtained a temporary restraining order and asset freeze against Mark Drucker of Atlanta, Georgia. The SEC alleges that Drucker raised $6.2 million from 80 investors by representing that he is a successful day trader and could get them returns of 50% or more on any money that he is permitted to invest for them. According to the SEC, Drucker “did not disclose to investors that he lost in excess of $630,000 trading in stocks in 1999, that he used the investment principal of recent investors to pay returns to earlier investors, and that he used money from investors to pay personal expenses, including hundreds of thousands of dollars to finance elaborate parties.” In an interesting twist to the case, the SEC has named a prominent Atlanta lawyer as a relief defendant in the proceeding. The attorney, Michael Weinstock, is not accused of any wrongdoing, but allegedly “invested approximately $1,035,916 and received approximately $1,575,514 from Drucker”. The SEC claims that he was “unjustly enriched” through his unwitting “participation in Drucker’s scheme” and, thus, seeks “disgorgement” of the amount he allegedly has been unjustly enriched, together with prejudgment interest. See SEC Gets TRO, Asset Freeze To Stop Ongoing Ponzi Scheme Operated by Atlanta Day-Trader, SEC Litig. Rel. No. 16335 (Oct. 15, 1999)