Your favorite court reporter is back, with our favorite grandma/hedge fund manager/fraudster, Karen Bruton battling it out in court. Original case: https://dockets.justia.com/docket/georgia/gandce/1:2016cv01752/227482 The Complaint: https://www.sec.gov/litigation/complaints/2016/comp-pr2016-98.pdf Her lawyers filed last September for a dismissal: https://www.yumpu.com/en/document/view/55949892/mtd-briefinsupport-09012016/34 Current state of affairs: https://www.pacermonitor.com/public...xchange_Commission_v_Hope_Advisors,_LLC_et_al A 100K earlier penalty against Hope Advisors for filing incorrectly: http://www.cftc.gov/idc/groups/publ...s/legalpleading/enfhopeadvisororder041515.pdf
Having lost 100 million of client funds, now the lawyers get a chance to take a piece of the pie. There is never a bigger loser than the individual who trust others with their money.
Every crime reminds me of the 7 Deadly Sins and 10 Commandments, Every man's downfall in history can be summed up by one of those, (or sometimes, there are just innocent victims...wrong place, wrong time) But of course, we are all just human...and constantly susceptible and tempted to push limits for our own pleasures,
Fraud is so easy to commit today....and many get away with it. The huge problem is that white collar criminals are never justly punished. Steal $10 million from clients ? - fine and probation. Steal $10 of goods from a grocery store ? - misdemeanor conviction. Our criminal justice system...not working too well.
She told her clients and the public that she made money every month. She then paid herself millions based on those profits booked. She did not tell her clients that her open positions were continuing to lose millions more each month. She gave the impression that by selling premium, she was able to make profits by having more winners then losers. The reality is that the tastytrade approach loses money overall as the naked short positions lose many times more money than the winners. Eventually the client money will all be lost if not stopped. If she was Goldman Sachs, I'm sure they'd Let the scam continue.
The best part is the yumpu link with her lawyer arguing for dismissal. I only read 2 pages but there are some spinzone logic there. I guess his argument was thrown out eventually. The last link is behind a paywall, sorry about that. But at least it shows that things started to move forward and the court case is proceeding... If this case goes to a jury trial, they are going to have trouble with the jury understanding just what exactly she was doing and why it was wrong. The case is in Georgia. after all, one of the least educated of the States. Also, just like at the Shkreli trial, certain things maybe amoral, but not illegal to do. Proving the intent to defraud is not very easy...
So sad. I was so desperate to want her to be a real winner: Such a heart warming story, small mom and pop retail trader like me beating Wall Street professionals at their own game with a method I could not make to work. Thank you for the update Mr. Pekelo, the truth is painful.
As discussed in the other Karen thread, I don't think we have enough information to say that she made or lost money for her investors one way or the other. https://www.elitetrader.com/et/thre...r-tastytrade-hybrid-experiment.300013/page-89 The claim is that she unlawfully rolled losers while realizing winners to generate fees. There's no reference to overall fund losses.