How a Securities Fraud Tip Led to the College Admissions Scandal
Wed 10th Jul 2019 | Posted by Glancy Law, on Blog
The college admission scandal is one of those stories that has gripped public attention and doesn’t show any signs of letting go. Whether it’s because you’re a fan of “Full House” and “Desperate Housewives” or are simply intrigued by rich people doing shady things to get their kids into school, Operation Varsity Blues has something for everyone.
It turns out that the criminal investigation that netted some 50 people spending roughly $25 million to grease the college admissions skids started out as a very different fraud case. Law enforcement officers were tipped off about the scheme by a man being investigated for securities fraud.
Securities and Exchange Commission investigators were questioning Los Angeles financier Morrie Tobin about his role in a possible “pump and dump” stock operation when Tobin turned them on to the college admissions scheme. He told them that the women’s soccer coach at Yale University had asked for a bribe to help get Tobin’s daughter into the school.
Tobin, who later signed a plea deal in the securities case, agreed to wear a recording device to a meeting with the coach, Rudy Meredith. The coach offered to designate Tobin’s daughter as a soccer recruit—lowering the academic standards she’d be required to meet for admission to the prestigious university—for $450,000.
After federal agents caught up with Meredith, he agreed in turn to roll on William Singer, the alleged mastermind of the college cheating scheme.
Tobin, meanwhile, plead guilty to one count of securities fraud and one count of conspiracy to commit securities fraud. Investigators say he didn’t tell investors that he controlled two public companies and then used offshore managers to sell his interest in those companies without alerting the SEC.
Securities Class Actions
It’s not every fraud investigation that turns up a nationwide cheating scandal of epic proportions. Still, the Tobin case is an example of one of the many common ways in which fraudsters try to get over on investors.
The good news is that the legal system gives jilted investors some important tools to fight back. That includes by joining a securities class action. These lawsuits are typically brought by one or a small group of people, seeking to sue on behalf of a wide range of investors who have all been defrauded.
Joining together in a calls action gives people who have been victimized by fraud the strength in numbers that they wouldn’t have if suing alone. That includes by increasing the potential punishment that a fraudster faces and limiting the costs of pursuing legal action for each individual class member.
Speak With an Investment Fraud Attorney
If you or a loved one has been the subject of securities fraud, it’s important to seek counsel of an experienced investment fraud lawyer.
At Glancy Prongay & Murray, our investment fraud attorneys have been representing people in securities, consumer and other fraud cases for more than 25 years. We have a strong track record of success in these cases. Call us at (310) 201-9150 or contact us online to speak with an attorney today.