New York Securities Lawyer Blog
Glen Galemmo, a Cincinnati money manager and former registered representative, has been sued by a two groups of investors in two separate lawsuits for operating an elaborate Ponzi scheme, which incurred approximately $300 million in losses for about 200 investors. Galemmo was most recently affiliated with FINRA member firm Landmark Investment Group, Inc., and Queen City Hedge Fund II, LLC. According to 2 complaints filed by investors, between 2006 and 2011, Galemmo claimed to have earned a 432% return by investing in stocks. Further, one of the complaints alleges that Galemmo, his wife, and his business partner, Edward Blackledge, used investor funds as “a cookie jar . . . withdrawing whatever they personally needed without detection or challenge.” The investor lawsuits also allege that investors began to notice irregularities in Galemmo’s reporting procedures. For example, on the annual K-1s that were sent to each investor, Galemmo failed to fill out the percentage of the managed funds belonging to that investor. Furthermore, according to the complaints, monthly update reports sent to investors contained many figures that were clearly rounded up. Investor suspicions were confirmed when, on July 17, 2013, Galemmo sent investors an e-mail stating that he would no longer be in business. According to the complaints, Galemmo’s July 17, 2013 correspondence instructed investors not to contact him, and that all investor inquiries should be directed to the Internal Revenue Service.
Further, it was reported that the United States Attorney’s Office filed a civil forfeiture action against Gelammo seeking the forfeiture of several of Galemmo’s bank and brokerage accounts valued at $334,000 in cash, along with an office building valued at $811,000, which was granted by a Judge in Hamilton County, Ohio. The forfeiture will protect Galemmo’s assets to possibly be distributed to victims during the pendency of state and federal criminal investigations into Galemmo. The Internal Revenue Service (“IRS”) has also reportedly opened an investigation to determine whether Galemmo was involved in wire fraud, mail fraud and money laundering.
Lax & Neville LLP has nationally represented small broker-dealers, financial services professionals and securities industry companies in regulatory matters and securities-related and commercial litigation. Additionally, Lax & Neville has extensive experience in successfully prosecuting claims on behalf of customers who have suffered losses, including losses incurred in a Ponzi scheme. Please contact our team of attorneys for a consultation at (212) 696-1999.