Staten Island Firm Fined in Boiler Room Scam
What better way to start the new year than with another round of fraud, insider trading and greed? A Manhattan federal judge certainly didn’t disappoint, slapping the Staten Island commodities trading company Richmond Global Entities with $3.4 million in fines and sanctions.
It seems that starting in 2001, the boys over at Richmond Global were running a boiler room and hawking shoddy foreign exchange contracts to at least 160 gullible investors. According to press release from the Commodity Futures Trading Commission, Richmond’s scamsters promised lucrative returns on what were in fact highly risky investments, lied about their experience in trading foreign exchange contracts, racked up big commissions they never told their customers about, and even buried the commissions in loss statements.
Altogether, the Commission claimed that Richmond bilked customers out of more than $1.7 million. But now they have to give all back. Sorry, fellas.
Meanwhile, yesterday was a bad, bad day for Mitchell Drucker and his dad Ronald, as a Manhattan federal court dropped the hammer on them. Once upon a time, Ronald Drucker was a New York City police detective, and his son was an associate general counsel of NBTY, Inc., a nutritional supplements manufacturer.
But when Mitchell learned that the company was about to announce lower than expected quarterly earnings, he called up his dad, and the two of them dumped their stock just before the announcement, avoiding $197,243 in losses. In her preliminary finding on December 20, federal judge Colleen McMahon sniffed that Mitchell Drucker lied on the stand and was insufferably unrepentant – never a strategic attitude when the feds have the goods on you. McMahon concluded that she was “convinced, by the brazenness of misconduct and by his cocky refusal to own up to it … is not fit to participate in the governance of any public company.” Maybe all those nutritional supplements went to his head.