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Investment scammer settles with SEC in California marijuana case

"Making profits for themselves while creating losses for unsuspecting investors."

That is certainly a mantra recurrently heard in the realm of security fraud scams operative in California and across the country, and a business model that many con artists scrupulously follow -- until they're caught.

Of course, the victims of their ruses are good-faith and unsuspecting individual and institutional investors who are defrauded of hard-earned cash, sometimes life savings. In matters with fortunate outcomes (not routinely the case), those investors get a portion or all of their money back. In other cases, well … they don't.

That latter potential is why it is critically important for any scammed investor -- or individual who even suspects broker/adviser fraud -- to contact a proven securities law attorney without delay for knowledgeable and aggressive representation geared toward securing a full remedy in the wake of fraudulent activity.

That would certainly have been a viable strategy for defrauded investors in a scheme recently detailed in a national Bloomberg report.

That ruse involved principals of a California marijuana-products company who unlawfully hyped the bottom line on corporate profits to fool investors and entice them into additional stock purchases.

They did so principally through creation of a bogus shell company that looked as though it was buying stock from the parent, when in fact no transactions ever took place. A "phony paper trail" made it appear as though purchases were being made. The shell company ultimately sold the parent's stock it owned -- worthless, but seemingly profitable to duped investors -- for premium prices, with cash infusions being funneled back personally to the architects of fraud.

As is true with many such scams, the ruse ultimately failed. The company promoter recently paid the SEC $12 million to settle a civil suit.

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