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MBC Managers Sentenced To Five Years For Role In $826 Million Securities Fraud
R. Alexander Acosta, United States Attorney for the Southern District of Florida, and Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation (“FBI”), announced that defendants Carol Traina and Bari Wiggins were sentenced today to five (5) years’ imprisonment, followed by three (3) years probation by United States District Judge Paul C. Huck in Miami. The defendants were also ordered to pay approximately $826 million in restitution to MBC investors. Traina and Wiggins were employee-managers at Mutual Benefits Corp. (“MBC”), a viatical and life settlement company that was closed by federal regulators in May 2004. On February 27, 2007, Traina and Wiggins each pled guilty to an Information charging one count of conspiracy to commit securities fraud, in violation of 18 U.S.C. §371 in connection with MBC’s billion dollar securities offering.
According to the Information, Traina, as MBC’s Office Manager, assisted MBC’s principals with the management of an international network of sales agents and marketing directors. Under her supervision, MBC’s sales agents misrepresented the safety and security of the investments that MBC offered and sold. Traina also admitted to a role in the creation and distribution of false and misleading life expectancy letters that misrepresented the health condition of insureds underlying MBC’s life insurance policies.
Under the supervision of MBC’s principals, Wiggins managed MBC’s Policy Services Department. In this position, Wiggins oversaw the acquisition of insurance policies. Wiggins admitted that she acquired MBC’s insurance policies, knowing that sales agents were misleading investors about the safety and security of MBC’s investments. Wiggins further admitted that she helped MBC fraudulently obtain certain group insurance policies, which also placed investors at risk of losing their money. Read more at fbi.gov.
Definition:
Cost of storing a physical commodity or holding a financial instrument over a period of time. These charges include insurance, storage, and interest on the deposited funds, as well as other incidental costs.
Butterfly Spread
Definition:
A three-legged option spread in which each leg has the same expiration date but different strike prices. For example, a butterfly spread in soybean call options might consist of one long call at a $5.50 strike price, two short calls at a $6.00 strike price, and one long call at a $6.50 strike price.
Aggregation
Definition:
The principle under which all futures positions owned or controlled by one trader (or group of traders acting in concert) are combined to determine reporting status and compliance with speculative position limits. See CFTC Backgrounder: Speculative Limits, Hedging, and Aggregation.
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