How an Investment Bank Settled a $250 Million Fraud Claim with Its Investors and the SEC

Background and Challenges 

An investment bank identified that one of its brokers had sent fraudulent account statements to hundreds of investors, overvaluing their portfolios by approximately $250 million. 

Approach

BDO was engaged to reconstruct account activity from paper records related to one of the largest broker-dealer frauds in U.S. history. Our team identified actual and fraudulent transactions, and reviewed falsified account statements, which included re-creating trading records of millions of transactions and hundreds of accounts. We analyzed the transactions to identify improper transfers between accounts and liquidation of funds. BDO also reviewed millions of pages of materials and conducted independent research on parties to identify fund recipients that were potentially related to the account holders.

Client Impact

BDO’s reconstruction and analysis allowed counsel to successfully negotiate settlements with account holders and the SEC.