The SEC has obtained an emergency court order freezing the assets of a Minneapolis money manager and a nationally syndicated radio personality for allegedly operating a foreign-currency-trading scheme.
The SEC has obtained an emergency court order freezing the assets of a Minneapolis money manager and a nationally syndicated radio personality for allegedly operating a foreign-currency-trading scheme.
Patrick Kiley pitched the unregistered investments on “Follow the Money,” a show that he hosted on radio stations nationwide, the Securities and Exchange Commission alleged in a complaint filed in U.S. District Court for the District of Minnesota. The complaint claims that Mr. Kiley and self-proclaimed money manager Trevor Cook sold the unregistered investments through shell companies by misrepresenting that they would deposit the funds in foreign-currency accounts.
The regulator said the duo claimed that the currency accounts would generate annual returns of 10% to 12%.
Instead, their foreign-currency trading resulted in millions of dollars of losses, according to the SEC. The pair allegedly misused about half of the investor funds to make Ponzi-like payments to investors and pay for Mr. Cook’s gambling losses and his purchase of the historic Van Dusen Center in Minneapolis.
“Cook and Kiley told investors that their money would be invested safely and profitably,” Merri Jo Gillette, director of the SEC’s Chicago Regional Office, said in a release. “Instead, they went on a $40-million-plus spending spree with investors’ money and lost another $40 million in risky foreign-currency trading.”
The SEC said the two men raised at least $190 million from more than 1,000 investors.
The commission is also seeking injunctions and disgorgement, as well as financial penalties, in connection with the case.
Attorneys for the defendants could not be reached for comment.
