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Matthew Sample of San Diego raised around $1 million, mainly from New Mexico investors, then fraudulently diverted one-third of the funds to himself, according to the Securities and Exchange Commission.

According to the publication Albuquerque Business First, Sample has settled with the agency and is permanently barred for violating securities laws. A judge still has to decide what, if any, restitution, fines and penalties Sample must pay, according to the publication.

Sample provided false documents to the investors, appearing that his trading strategy was successful. A mini-Ponzi scheme raised its ugly head, too: Sample raised money from a new investor under false pretenses, says the securities agency, and used that investor's funds to make a partial repayment to other investors.

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Burwell June 7, 2014 @ 2:42 p.m.

It looks the case was only civil. If he stole hundreds of thousands from investors to pay his personal expenses, why can't DA Bonnie Dumanis charge him with theft and fraud? How hard could it be to prosectute and convict Sample? What credible defense could he offer? I don't understand why these investment theft cases are settled with fines and restitution that the prepetrator never pays. It should be legally possible for DA Dumanis to charge Sample with fraud even though the SEC filed a civil suit against him.

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Don Bauder June 7, 2014 @ 6:27 p.m.

Burwell: To my knowledge, this is only civil. The SEC is only a civil agency, as you know. You make a very good point. The man has reached a consent decree ("I didn't do it, but I won't do it again") with the SEC. An agency with criminal authority really should consider picking this up. Best, Don Bauder

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Burwell June 7, 2014 @ 6:45 p.m.

It makes more sense for local DA's to prosecute investment fraudsters. The SEC could then piggy back off the local DA's prosecution and discipline fraudsters for criminal convictions. Sample stole at least $300,000 from his investors. This situation is like the DA obtaining a civil injunction against a bank robber prohibiting him from robbing banks in the future in lieu of prosecuting the thief for previous bank robberies. I have never been able to find out why investment fraudsters are seldom prosecuted for their crimes.

If Sample had known that he would be prosecuted and sent to a real federal prison, a prison in which prisoners are routinely stabbed, beaten up and raped, it's likely that he would not have robbed his investors.

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Don Bauder June 8, 2014 @ 10:07 a.m.

Burwell: Your points are excellent. I remember a conversation I had more than 40 years ago with an official of the SEC, speaking not for attribution. Said he, "A guy knocks off a gas station for 25 bucks and goes to prison for years. A guy steals hundreds of millions in a stock market scam and gets off."

Look at the unrest over the government's shameful unwillingness to put bank executives in prison for crimes during the 2008-early 2009 crash that led to a $14 trillion bailout.

Trouble is, there is not ENOUGH unrest. And police, with support from the federal government, brutally shut down the Occupy movement. The protesters went to jail, not the Wall Street crooks who were the cause of the protests. Best, Don Bauder

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Don Bauder June 7, 2014 @ 6:24 p.m.

danfogel: Actually, the complete charges are on the SEC website -- not just the news release. Best, Don Bauder

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danfogel June 8, 2014 @ 10:05 a.m.

Don Bauder, I meant to say more complete information, as in more complete than was provided in the story. I wouldn't normally say complete because, well it is the the government and who knows when the complete story is being given. And the page link provided is the SEC website and that page provides a link to the complete charges, again for those interested in more complete information than what was provided in the story. Personally, I think that anyone who throws a couple of hundred grand to a hedge fund advertising up to 24% in yearly returns without doing their due diligence is either a fool or someone who has so much money, that they don't care or both. But that's just me.

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Don Bauder June 8, 2014 @ 10:11 a.m.

danfogel: The tragedy is that the people who are victims of such crimes do NOT have money. They have little money, and no sense. But I do think it is the government's obligation to punish such crooks -- criminally -- and not let them off the hook with a consent decree from an agency such as the SEC, which was set up in the 1930s to protect the public from Wall Street but now protects Wall Street from the public. Best, Don Bauder

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