|  | | 2008 News and Press Releases | | |
SETTLEMENT NEWS:
Class Certified In Case Alleging $50M Ponzi Scheme
Ben James
Securities Law 360. October 28, 2008
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EXCERPT: The federal judge overseeing a securities suit against MRT Holdings LLC has certified a class of investors who claim they were victimized in a $50 million Ponzi scheme related to foreign currency futures trading. Judge James Cohn of the U.S. District Court for the Southern District of Florida signed off on a 12-page order granting the plaintiffs' bid for class certification on Friday. The class – which could contain 600-1,200 members, according to the plaintiffs – comprises all purchasers who bought investment contracts with MRT LLC or MRT Holdings LLC between March 1, 2006 and October 5, 2007. The alleged scheme involved MRT soliciting at least $50 million in investments for the stated purpose of trading foreign currency futures offshore with Swiss banks, and promising (and in some cases paying) interest rates ranging from around 12 percent annually to as high as over 11% percent per month, the plaintiffs said in their Oct. 9, 2007 complaint. Those investments constitute investment contracts, and thus qualify as securities under the Securities Act of 1933 and the Securities Exchange Act of 1934, the complaint said, going on to assert that no registration statement was ever filed in connection with the investment contracts offered and sold by the defendants. The defendants issued materials and made statements to investors saying that NRT's FOREX trading activities were profitable, while in fact MRT was operating as a Ponzi scheme and incurring huge losses, said the plaintiffs, who added that MRT depends on selling new investment contracts to meet financial obligations like interest payments and capital refunds to current investors. MRT doesn't have the financial resources on hand to make interest payments to current investors, and some of the named plaintiffs haven't seen any payments since April 2007, according to the complaint. ... The case is Katz et al., v. MRT Holdings LLC et al., case number 07-61438 in the u.S. District Court for the Southern District of Florida. |
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