On July 3, 2012, the Securities and Exchange Commission (“SEC”) announced that it obtained a court order freezing the assets of a Georgia-based investment adviser who apparently has gone into hiding after orchestrating a $40 million investment fraud. At least $20 million of the investment victims’ money was lost through trading in account that the investment advisor had opened with Goldman Sachs, but the investment advisor apparently hid those losses through bogus account statements.

The SEC alleges that Aubrey Lee Price raised money from more than 100 investors living primarily in Georgia and Florida by selling shares in an unregistered investment fund (PFG) that he managed. Price represented to investors that he would be investing their money in traditional marketable securities, but he also made illiquid investments in South American real estate and a troubled South Georgia bank.

A significant portion of PFG investor funds – approximately $36.9 million – was placed in a securities trading account at Goldman Sachs. According to PFG’s private placement memorandum, PFG’s investment objective was to achieve “positive total returns with low volatility.” Despite that alleged goal, the Goldman Sachs account suffered massive trading losses. As investment losses grew, Price provided investors and bank regulators with fake account statements that showed false account balances and fictional investment returns. According to the SEC, Price also frequently wire transferred money from the Goldman Sachs account to PFG’s operating bank account at Bank America.

According to the SEC’s complaint, Price sent a letter to some individuals dated June 2012 and titled “Confidential Confession For Regulators – PFG, LLC and PFGBI, LLC Summary.” In the 22-page letter, Price apparently admits that he “falsified statements with false returns” in order to hide between $20 million and $23 million in investor losses. Price has been charged with committing securities fraud.

If you lost money in Price’s PFG fund, contact an experienced investment fraud lawyer at DKR to discuss the potential legal options that you have to recover your investment losses.

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