There will be much much more of this in the years to come.
SEC accuses Sunwest Management of securities fraud. A major corporate operator of assisted-living facilities and its founder were accused of a massive securities fraud on March 2 in what the Securities and Exchange Commission (SEC) charged was a scheme that raised $300 million from investors who now face the loss of their money. The allegations target Oregon-based Sunwest Management; the firm’s founder and former CEO; and several related entities and individuals. The former CEO’s defense attorney said his client had done nothing wrong. Lawyers for Sunwest did not immediately respond to a message seeking comment on the case. At its peak in 2007, Sunwest managed more than 320 retirement facilities in 34 states and had estimated assets of $2 billion, SEC said. But the company collapsed in December as the former CEO filed for bankruptcy court protection. From 2006 through 2008, the former CEO allegedly raised $300 million from more than 1,300 investors who were told that their money would buy partial ownership interest in a specific retirement facility and provide a 10 percent annual investment return, SEC charged. But the money was allegedly commingled in a single fund that was used to pay operating expenses, investor returns, and other costs. As a result, SEC charged that misled investors did not realize that more than half the retirement sites were losing money.
Buckle your seatbelts!
(H/T Mike Pliss)