SEC Charges Two Men In Prime Bank Fraud
Undated (AP) _ Regulators charged two businessmen Monday with illegally raising $2 million through the sale of fictitious securities.
The Securities and Exchange Commission filed a federal lawsuit in U.S. District Court in Manhattan charging Harold Glantz, 60, and Peter H. Block, 60, operated a fraudulent investment program between February 1992 and March 1994.
During that time, the SEC charged the two raised $1 million from Jeffrey Cantwell of Moorestown, N.J., and $1 million from the pension fund of Cardinal Systems Inc., described as a small business in Schuylkill Haven, Pa.
The lawsuit alleges the two sold so-called prime bank notes, which are fictitious securities promoted as having the security and backing of a traditional bank. Also sold were zero interest credit instruments, or ZICIs, and zero interest letters of credit, or ZLOCs, which also are fictitious.
Sale of ″prime bank notes″ is the latest fad in the world of financial fraud, regulators say. The SEC, the agency which policies the financial markets, has filed numerous lawsuits in recent months to halt prime bank fraud. Over the past few years, investors worldwide may have lost $500 million or more in prime bank cases, Business Week magazine reported in June.