Posted Mar 19, 2010 02:42 pm CDT
A former partner in the McNair Law Firm has been accused of participating in a $3.5 million Ponzi scheme that lured investors with promises of returns as high as 4,900 percent in two months’ time.
The Securities and Exchange Commission alleges M. Mark McAdams of Myrtle Beach, S.C., worked with a former investment broker to attract investors to Global Holdings, the company they founded in 2007, according to stories in the Sun News, the State, Courthouse News Service and the National Law Journal.
The civil suit (PDF) claims McAdams used the letterhead and e-mail system of a “prestigious South Carolina law firm”–identified as McNair in news stories–to communicate with investors and conduct Global Holdings business. The firm was unaware McAdams was exploiting his law firm connection, the SEC says.
McAdams later resigned from McNair, where he had been a shareholder, because of his activities. He went on to form his own firm.
McNair’s managing shareholder, David Tigge, told the State, “We do not condone what he did.”
The complaint alleges McAdams and co-defendant R. Dane Freeman promised investors they would buy bonds from issuers at a discount and resell them for a profit on international trading platforms. Global Holdings never purchased or sold bonds, and investors didn’t receive promised profits, a press release claims.
According to the complaint, “McAdams received many questions about the high yield investment program from the outset, from investors and his own family members, to whom McAdams vouched for the existence and legality of the global trading platforms that supposedly would generate such outlandish returns.”