SEC Fraud

Ponzi Schemes, where early investors are paid using the money given by later investors (very illegal), are alive and well and today the SEC sued a Miami resident for running one. Andres L. Pimstein and two private companies, The Bottom Line of South Florida, Inc. and Summit Trading LLC, were charged with securities fraud in running a $30 million Ponzi scheme.

The SEC’s complaint alleges that from at least 2005 to April 2008, Pimstein and his agents offered and sold more than $30 million in securities to at least 80 investors in at least five states, purportedly to fund an export business that Pimstein operated through Bottom Line and Summit. The Ponzi scheme collapsed when the interest and principal Bottom Line and Summit were obligated to pay investors substantially exceeded the amount of new funds Pimstein and his agents were able to raise from investors.

Pimstein is done since he admitted to police he had operated the scheme in the first place.