BofA aided hedge fund fraud with bogus valuations
September 19th, 2009
According to her decision, it was “standard procedure” at Bank of America Securities “to enter data about restricted stock with the same ticker in the same way as the trading stock unless otherwise instructed by the client.” By doing so, the restricted shares automatically were valued at the same price.
According to the judge, a Lancer fund bought restricted stock in one company for a bit more than four cents a share and told Bank of America to record them as being worth $1.50 each, which it did. The result was that a $1.7 million investment was shown as rising 3,384 percent, to $60 million.
All this sounds like a tale from the late 1960s, as recorded in John Brooks’s classic book, “The Go-Go Years.”
Related posts:
Posted in Implode