|  | | 2008 News and Press Releases | | |
HEADLINE NEWS:
Court Slaps Injunction On 12 Lake Shore Entities
Christine Caulfield
Securities Law 360. April 28, 2008
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EXCERPT: Securities regulators have won a court injunction against the many foreign-based entities of Lake Shore Ltd. in the ongoing litigation accusing the commodity pool operator of defrauding investors out of hundreds of millions of dollars. The U.S. District Court for the Northern District of Illinois granted the U.S. Commodity Futures Trading Commission's motion for a preliminary injunction order on Thursday, enjoining additional commodity pools controlled by Lake Shore's principal, Philip J. Baker. After the district court amended its earlier preliminary injunction order accordingly, directly enjoining only Lake Shore Ltd, the CFTC responded with an amended complaint listing every single entity of the embattled pool operator as a defendant and renewing its call for an injunction. The amended complaint, filed on Feb. 19, added 12 commodity pools overseen by Baker, and alleged that Chicago-based Lake Shore, parent company Lake Shore Group and the many entities — collectively known as Lake Shore Common Enterprise — were all responsible for scamming investors. The modified complaint alleges that Lake Shore and its affiliates fooled pool participants into investing a combined $300 million by promising unrealistic profits and issuing phony account statements showing inflated earnings. The defendants also pocketed $11 million from investors' funds by improperly charging incentive fees and purported administrative expenses and fraudulently transferring profits to accounts owned by Lake Shore entities, the commission said.
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