Alleged Manipulator Charged With Securities Fraud

 

According to an AP press release, a former investment broker in Ohio and Maryland has been accused by the Justice Department of helping the founder of an investment fund manipulate the stock price of Duluth, Ga.-based logistics company Innotrac Corp. to assist his client, David Dadante, and the IPOF Fund that Dadante controlled.

Stephen J. Glantz, 54, of Chagrin Falls, Ohio, and Phoenix, Md., was charged Tuesday with securities fraud and making false statements.  The Justice Department alleges that from August 2002 through November 2005, Glantz helped Dadante accumulate nearly 4.2 million shares of Innotrac, with a large portion purchased on margin, according to the charges. Margin involves borrowing money to purchase securities and using those securities as collateral. If convicted, Glantz could receive up to 20 years in prison for the securities fraud and five years for false statements.

Dadante, 53, of South Euclid, Ohio, pleaded guilty Aug. 16 to securities fraud and is scheduled to be sentenced on Nov. 1 in U.S. District Court.  According to an SEC complaint last year, Dadante raised about $50 million from at least 110 investors. He is accused of using new investor money to pay guaranteed returns to previous investors and taking millions of dollars for his own use. Prosecutors have said Dadante lost about $28 million through bad trades.

Based on the press release, it appears that this alleged fraudulent scheme was nothing more than a Ponzi scheme that undoubtedly cost many investors their life savings.  While in many instances, victims of Ponzi schemes do not ever recoup their losses, Page Perry has helped investors navigate their way through these unfortunate situations.  In some instances, solvent companies or individuals are involved in these scams and victims may be able to recoup some or all of their losses.