Recently, the Department of Business Oversight issued the following warning:
The DBO has become aware that past investors in Leland Energy are being solicited by a purported New York State-licensed attorney claiming to have been hired by the State of California to contact them regarding $6.5 million in funds he claims to hold from the State’s 2012 settlement with Leland. For a fee, this person claims he will release those funds to the investor/victims. The DBO settled its case with Leland in January 2012, and Leland agreed, pursuant to the settlement, to directly repay certain California victims on a pro rata basis. The state has not retained an attorney to disburse funds to investors and has no settlement funds to disburse to investors.
The California Securities Owner Protection Law criminalizes fraudulent conduct “in connection with the solicitation, receipt, or collection of, or solicitation of any subscription or contract to pay any contributions, fees, funds, or compensation of any kind, from any owner or holder of any security, for the purpose of protecting, enforcing, or representing the rights of the security owners or holders evidenced by the security.” Cal. Corp. Code § 27101. Although the law refers to “individuals”, it isn’t limited to natural persons. As used in the law, “individual” includes, with certain exceptions, every natural person, domestic or foreign private corporation, nonprofit corporation, unincorporated association, company, partnership of whatever kind, syndicate, joint stock company, trustee, protective committee, depositors’ league, and other similar organization however described. Cal. Corp. Code § 27002(a).
A Ticket to Malebolge
In the first part of Divine Comedy, Dante Alighieri takes the reader on a journey through the nine circles of Hell. The last and most terrifying two circles are reserved for people who betray the trust of others. The eighth circle, named “Malebolge”, is itself divided into ten ditches based on the particular species of fraud practiced by the condemned. Preying on victims of securities fraud may be the surest ticket to one of those evil ditches.
