On Jan. 15, the Securities and Exchange Commission obtained an emergency court order to freeze the assets of Atlanta-based CRE Capital Corp. and its president, James G. Ossie. According to the SEC complaint, CRE and Ossie fraudulently obtained at least $25 million from investors during 2008 by representing that it would use their money to engage in a currency trading program. Most investors were advised that they would receive guaranteed returns of 10% every 30 days, although a few investors were promised as much as 20%, the SEC said, adding CRE's currency trading was not profitable and returns were paid to investors out of principal and money invested by later investors.
According to the complaint, CRE also falsely claimed that the firm and its program were audited by an outside accounting firm, which had concluded that CRE was not a Ponzi scheme. The SEC's complaint charged CRE and Ossie with fraud relating to their offer to sell $100 million in CRE stock that was slated to begin in early 2009.The SEC's emergency court order requesting a freeze of CRE and Ossie's assets also seeks to appoint a receiver.
"The SEC's emergency action in this case will protect investors from further harm-both those who have invested and need all remaining assets preserved as well as those who were contemplating an investment," said Katherine Addleman, regional director of the SEC's Atlanta office. "We also want to remind investors to be skeptical of promoters promising exorbitant returns. Such claims should be a red flag to investors."
Since December, the commission has discovered several Ponzi schemes including one involving $50 billion through Bernard L. Madoff Investment Securities LLC.
President's Council Releases
WASHINGTON -- The President's Advisory Council on Financial Literacy's first annual report to the president has identified 15 recommendations to improve the financial literacy of Americans of all ages.
Among the report's recommendations are calls for mandating financial education in schools for students in grades K-12; exploring tax incentives to encourage employers to provide financial education in the workplace; increasing access to bank accounts for the tens of millions of unbanked and underserved Americans; conducting research on the state of financial literacy in America and on the most effective ways to improve financial knowledge among Americans; and creating a self-administered "national financial literacy check-up" that would allow Americans to assess their own financial knowledge and providing links to trustworthy sources of information to help fill in the gaps.
"Financial literacy has never been more important than it is today," said Council Chairman Charles R. Schwab. "There is no question that the lack of personal financial literacy has been a major contributing factor to the economic and financial crisis in the United States. We believe that this report contains recommendations that will help Americans at all stages of life learn the financial basics so that they can manage their own money wisely, save for the future and navigate our complex economy effectively."
Navy Federal Credit Union CEO Cutler Dawson also serves on the panel. The council, which is scheduled to remain in place through January 2010, plans to work with members of Congress, the executive branch, the private sector and faith-based and nonprofit organizations in the coming year to implement the recommendations.
The President's Advisory Council on Financial Literacy was created by President George W. Bush in January 2008, to advise the president and the secretary of the Treasury on ways to improve financial literacy among all Americans. The full report can be found at http://www.treas.gov/ofe.