In Ohio, investors are suing Glen Galemmo for allegedly running a Ponzi scam. The securities fraud lawsuit claims that approximately 100 to 200 investors lost more than $300 million. Galemmo is now named in two complaints related to these claims. His wife, Kristine Galemmo, is also being sued, as are his business partner Edward Blackledge and numerous investment funds, LLC, and companies. Plaintiffs are grouped as the Galemmo Victims Fund I and II.
The Cincinnati money manager ran Galemmo Investment Group, Queen City Investment Fund, and other entities for over a year. However, last month, he sent out a mass email to investors explaining that Queen City Investments, which he owns, was stopping operations. He told them not to come to the building because they would not be let in and that his lawyer had told him to avoid contact with them. He said that their inquiries should go through the IRS.
According to the complaint, Galemmo claimed to have over $20 million in assets under management. When the S & P 500 was declining between ’06 and ’11 he purportedly said that he’d made earning returns of 432% by investing in individual stock.
The plaintiffs say that if Galemmo’s return numbers had been accurate, then his compensation should have been over $60 million yet he wasn’t even able to pay small tax bills. They say that documents never indicated dividend income payments and filings didn’t state how much of the fund investors held.
Galemmo previously explained his strategy in a media interview with the Cincinnati Business Courier in 2001 as concentrating on stock that were undervalued but showed “potential for runups” and he allegedly told customers that he would purchase low, sell high, and respond fast to changes in the market. He also purportedly hid the Ponzi Scam via a number of actions, including having different brokers invest assets so it would be hard to get a grasp of his holdings or the performance of investments.
Most of the victims are from Cincinnati. They contend that as part of the Ohio Ponzi scam, Galemmo paid some investors’ money to pay earlier investors and that the money manager and his associates bilked them.
They are alleging misrepresentations and omissions, the making of false statements, failure to disclose material facts, failure to exercise reasonable care, breach of fiduciary duty, failure to invest funds in the manner purported, using funds for unapproved purposes, violating the Ohio Revised Code’s Chapter 1707, and other allegations. They want damages and a declaration by the court that laws were violated, a temporary restraining order of the defendants’ funds, and well as preliminary and permanent injunction.
If you suspect that you were the victim of stockbroker fraud, contact our Ponzi fraud lawyers today and ask for your free case assessment.
Cincinnati money manager accused of ‘elaborate Ponzi scheme’, Cincinnati Business Courier, July 24, 2013
Read the Complaint (PDF)
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