March 25, 2011

Latest ‘Mini-Madoff’ Arrested in Spain, Accused of $300 Million Fraud

Offered returns of as much as 10% to 20% monthly, instead used the money to buy real estate

More On Legal & Compliance

from The Advisor's Professional Library
  • Do’s and Don’ts of Advisory Contracts In preparation for a compliance exam, securities regulators typically will ask to see copies of an RIAs advisory agreements. An RIA must be able to produce requested contracts and the contracts must comply with applicable SEC or state rules.
  • Anti-Fraud Provisions of the Investment Advisers Act RIAs and IARs should view themselves as fiduciaries at all times, whether they meet the legal definition or not.  Deviating from the fiduciary standard of full disclosure while courting clients may cause the advisor significant problems.

Spanish police said they arrested a foreign-exchange operator suspected of running a $300 million Ponzi-type fraud that may have affected at least 100,000 investors in Europe, the U.S. and Latin America.

Bloomberg reports the latest "mini-Madoff," a reference to jailed con man Bernard Madoff, offered returns of as much as 10% to 20% monthly for investments in foreign currencies and instead used the money to buy real estate for himself and colleagues, according to a National Police statement today.

The man, German Cardona Soler, is 49 years old and a Spanish citizen, said a police spokeswoman who declined to be named, following agency policy. He was arrested in the Mediterranean city of Valencia. Two more people were apprehended and seven people were accused in relation to the suspected fraud, the statement said.

Accounts in 12 banks have been blocked and the titles frozen for more than 20 properties in Spain, the police said.

Reprints Discuss this story
This is where the comments go.