FOR IMMEDIATE RELEASE:
September 20, 1999
Attorney General J. Joseph Curran, Jr. announced today that his office's Securities Division has obtained a temporary restraining order against an Ellicott City man and his Baltimore-based company, charging them with operating a Ponzi scheme involving claims by investors of more than $12 million.
According to the order, issued by Circuit Court Judge Evelyn O. Cannon, all assets of Starboard Associates, Inc., 516 N. Charles St., Baltimore and of E. Robins Rich, 4018 MacAlpine Rd., Ellicott City, are temporarily frozen and a temporary receiver has been appointed to take control of the company and assets.
Curran's Securities Division alleges that Rich has violated Maryland's securities laws by offering and selling unregistered investments and acting as an unregistered securities agent and investment adviser. Curran alleges that more than 500 investors participated in Rich's and Starboard's investment program and that Rich has offered unregistered securities for at least 15 years. The complaint alleges that investors thought they were putting their money into a combination of a money market account and a stock option trading program. However, it appears that most of the money coming into the program was used to pay other investors who wanted to withdraw funds. Rich allegedly created fraudulent statements to induce investors to keep their money in the program and to solicit more money for the program.
"We had to bring a receivership action quickly in this case to protect investors' monies," said Attorney General Curran. "By placing the company and Mr. Rich into receivership, we can trace the funds in this scheme and preserve the remaining assets for investors."
Curran emphasized that the Securities Division's investigation of this matter is continuing and urges anyone who invested funds with Starboard or E. Robins Rich, or who has information concerning that investment program, to call the Securities Division of his office at 410-576-7009.
Curran recommended that investors call the Securities Division at 410-576-6360 before they invest to find out whether their investment adviser, broker and securities are registered. Even when an investment program looks reasonable, and friends and family trust the promoter, it's better to take a few minutes to verify the status of the promoters, he said.