SEC Charges New York Man With Operating Ponzi Scheme

The Securities and Exchange Commission announced that it had filed a settled civil action against a New York man and his investment company that ultimately took in over $15 million from investors.  James M. Peister, of Saint James, New York, and Northstar International Group were charged with intentionally overstating the assets of the North American Globex Fund, LP in an elaborate scheme to defraud investors. As part of their agreement with the SEC, Peister and Northstar consented to a permanent judgment enjoining them future violations of various sections of the Securities Act of 1933 and the Investment Advisors Act of 1940.

According to the complaint filed by the SEC, Northstar was the general partner of the Globex Fund, which was formed in 2000 to solicit investors.  Ultimately, The Globex Fund attracted 72 investors who purchased limited partnership interests in the Globex Fund totaling over $15 million.  Investors were provided with fictitious marketing materials that falsely advertised the Fund's positive monthly returns for eighty out of the eighty-four months from January 2001 to December 2007.  These yearly returns ranged from a low of 9.46% in 2006 to 31.6% in 2001.  Additionally, Peister overstated the assets under management in the Globex Fund, collecting management fees based on these inflated figures.  

The scheme began to unravel in early 2009 when Northstar's auditors resigned due to incomplete information provided concerning Northstar's financial records.  Along with permanent consent judgments, the SEC is also seeking civil penalties and disgorgement of ill-gotten gains.