The SEC charged a purported money manager, his New York City-based investment adviser, and two of his associates with conducting an affinity fraud and Ponzi scheme that specifically targeted investors living in the Caribbean and African-American communities of Brooklyn, New York.
The SEC alleged that Gedrey Thompson, through his firm GTF Enterprises Inc., convinced investors to entrust him with money that he claimed to trade on their behalf. Thompson assured investors that the investments were risk-free and employed "stop-loss" trading techniques, and he guaranteed quarterly returns ranging from 4% to 20%.
According to the SEC, Thompson invested only a fraction of investor funds and sustained thousands of dollars in trading losses from those investments. The SEC alleged that he sent investors fake quarterly account statements that hid those losses and instead showed lofty returns. Thompson also made Ponzi-like payments to earlier investors, and he stole thousands of dollars in investor funds to pay for exotic trips and other personal expenses. GTF's account manager Dean Lewis and assistant treasurer Sezzie Goodluck were also charged in the fraud that caused many investors in GTF to lose their life savings.
The SEC alleged that Thompson and Lewis made a number of false or misleading representations to con investors. For example, they claimed that GTF practiced sound and careful investing and assumed all trading risk. They also falsely represented that key GTF personnel had extensive experience with Wall Street's top financial firms. Thompson himself boasted false trading qualifications and misstated GTF's success as an investment company. According to the SEC, Goodluck, a J.P. Morgan Chase Bank employee in Brooklyn at the time, also recruited at least two Chase customers to invest in GTF without disclosing those outside activities to Chase. By 2009, Thompson had dissipated all of the funds that investors had invested in GTF.
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