Manhattan Investment Advisor Arrested For Alleged $8 Million Scam

LAWFUEL – The Legal Newswire – MICHAEL J. GARCIA, the United States Attorney for the Southern District of New York, announced that HAYIM REGENSBERG, president of Arbco Capital Management, LLP (“Arbco”) and Mid West Trading LLC (“Mid West”), was arrested today on securities and
wire fraud charges stemming from an alleged $8 million “Ponzi”
scheme involving purported international IPO and other investment
products he marketed to several investors from New York City and
elsewhere. According to a criminal complaint and affidavit filed
in Manhattan federal court:

REGENSBERG engaged in a scheme to defraud multiple
investors and steal their funds by promising to invest their
money in one of two ways. In connection with the first (the “IPO
Product”), REGENSBERG purported to be investing the victims’
money in either international initial public offerings (“IPOs”)
or pre-IPO stock, and represented that he had contacts which
enabled him to sell the Product earlier than other players in the
market, and thereby receive a quick profit with little or no

In connection with the second (the “Lending Product”),
REGENSBERG claimed that he would loan pooled investors’ money to
trading institutions as short-term loans, which would serve
merely as collateral and would not be placed at risk in those
trading companies’ investments. REGENSBERG told investors that
their principal investments were therefore “safe,” and each
investor was promised a rate of return, often in writing, which
varied from investor to investor and ranged between 10 and 18

According to the Complaint, REGENSBERG stole the
investors’ funds rather than investing them in the manners
promised; among other things, ROSENBERG gave significant amounts
of the funds to his relatives. ROSENBERG also invested and lost
large portions of the money in highly speculative options
trading. REGENSBERG paid out some of the money he took in from
new investors to earlier investors in amounts he claimed to be
“profits” from investments, thereby perpetrating a “Ponzi”

When some investors confronted REGENSBERG about the
fact that they had stopped receiving regular payment of promised
investment returns, and asked him whether their invested proceeds
were safe, REGENSBERG provided the investors with a forged bank
document purporting to show he still maintained approximately $9
million in an Arbco bank account, when in fact that account
contained only approximately $9,000 at that time.
According to the Complaint, REGENSBERG stole, and/or
lost in speculative trading, in excess of $8 million in investor

The Complaint charges REGENSBERG with one count of
securities fraud and one count of wire fraud. REGENSBERG faces a
maximum sentence of 20 years in prison on each count. He also
faces on the securities fraud count a fine of the greater of
$5,000,000 or twice the gross gain or gross loss from the
offense, and on the wire fraud count a fine of the greater of
$250,000 or twice the gross gain or gross loss from the offense.
REGENSBERG, 43, lives in Manhattan.

The case was investigated by the Criminal Investigators
of the United States Attorney’s Office for the Southern District
of New York. Mr. GARCIA thanked the Federal Bureau of
Investigation for its assistance in the investigation, and said
that the investigation is continuing.
Assistant United States Attorney DAVID SIEGAL is in
charge of the prosecution.

The charges contained in the Complaint are merely
accusations, and the defendant is presumed innocent unless and
until proven guilty.

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