SEC Halts Leverage Group’s $40 million Ponzi Scheme

September 8th, 2009
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The SEC announced today that it had charged Philip G. Barry of Brooklyn, New York for operating a $40 million Ponzi scheme through his various firms: Leverage Group, Leverage Option Management Co., Inc, and North American Financial Services. Mr. Barry allegedly lured in approximately 800 investors by falsely guaranteeing them high returns (as much as 21%) through safe and liquid investments. Instead of managing client’s investments, he used new investor cash to repay earlier investors, purchase real estate for himself and to cover other personal expenses. He is also accused of using investor’s assets to run a pornography mail order business.

Mr. Barry provided his clients with false statements that showed that their investments were growing. Meanwhile, he reportedly had not trading any investment securities on behalf of his clients for years. In an SEC statement, the Director of the SEC's New York Regional Office George S. Canellos stated "Barry was an unscrupulous and unregulated investment manager who lured victims with false promises of investment safety, lofty performance, and liquidity."

The press release also stated that “Without admitting or denying the allegations in the complaint, Barry, Leverage Group, Leverage Option Management Co., Inc, and North American Financial Services agreed to settle the SEC's claims against them and consented to the entry of a judgment, subject to approval by the court, that enjoins them from future violations of the above provisions of the securities laws and orders them to pay disgorgement, prejudgment interest and a civil penalty, the amounts of which will be determined at a later date. Barry also has consented to the issuance of a Commission order barring him from association with an investment adviser.”
For Detailed Investor Profiles on these Investors, click below:
Leverage Group
Related People: Philip G. Barry
Related Article Tags: Hedge Fund Fraud and Ponzi Scheme News


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