In February 2009, the Securities and Exchange Commission (“SEC”) filed a Complaint against Anthony Vassallo (“Vassallo”), Kenneth Kenitzer (“Kenitzer”) and Equity Investment Management and Trading, Inc. (“EIMT”) in the United States District Court for the Eastern District of California. The Complaint alleges that Vassallo and Kenitzer operated a $40 million Ponzi Scheme through EIMT from May 2004 through November 2008, which defrauded approximately 150 investors. Vossallo and Kanitzer were able to perpetrate this fraud by sending the EIMT investors false monthly performance reports which lead investors to believe that EIMT was engaging in actual securities transactions which generated an approximate 36% annual return. Reportedly, EIMT purported to implement a computer program designed by Vossallo to time the stock market and produce a virtually risk-free 36% annual return. According to the Complaint, the EIMT Ponzi Scheme was revealed in November 2008, when Vossallo and Kanitzer were unable to satisfy investor requests to access their investment funds as it lost nearly all of its investors’ funds. On April 30, 2009, Stephen Anderson was appointed as the receiver of EIMT. Since his appointment as receiver in April 2009, Mr. Anderson has been seeking to recover funds from various sources with the intention of distributing such funds to EIMT investor victims who lost virtually all of their investments with EIMT. Kenitzer, Vassallo’s co-conspirator, has already pleaded guilty and is awaiting sentencing.
Lax & Neville LLP effectively assists investors, on both a regional and national level, that may have suffered losses as a result of their broker dealer’s breaches of fiduciary duties and/or disregard for their investment interests, including losses suffered in Ponzi Schemes. Please contact our team of securities fraud attorneys for a consultation at (212) 696-1999.