Victims of a convicted Ponzi schemer will benefit from an arbitration award stemming from that criminal’s own poor investments, the Wall Street Journal reported today. A trio of brokers has agreed to pay $2.75 million to settle arbitration claims about their role in various unsuccessful investments purchased by Gregory McKnight, who is currently in jail after having been found guilty of a roughly $72 million Ponzi scheme. That settlement money will go to help compensate victims of McKnight’s fraud, which, according to the Securities and Exchange Commission, involved more than 3,000 investors from across the country, as well as several foreign countries. So far, just $1.5 million has been distributed by the receiver to those investors, according to court documents. Read more. (Subscription required.)
For further analysis of financial fraud and ponzi schemes, be sure to pick up a copy of ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case.