Is Steve Atwater a Shill?
Was Steve Atwater a shill for Kirk S. Wright? I don't know the answer to this, but Mike Tierney's revealing article a few days ago would have me concerned for several reasons. As reported by Mike Tierney, Atwater received compensation of 1.5% per referral. Let us work some numbers here. If I gave Wright $1,000, expecting a the historical IMA return of 20%, then after Atwater took his take, Wright would have only had $985 to work with. If Wright could actually produce in one year a return of 20%, ie $1200, then Wright would have had to make $215, or roughly 43/197 or 22.3% return.
Is the difference between 20% and 22.3% significant enough to alert someone performing due diligence? Should have Steve Atwater known he was enabling, even innocently, scam?
Well, the master of this scam was Charles Ponzi., and he cut his sales force in for 10% - and with a 50% payout in 3 months. So Mr. Atwater's referral commission is not out of line, but was it disclosed to the investors? If so, did they realize the significance of how much more return and therefore risk IMA funds had?
Technorati Tags: steve atwater, charles ponzi, mike tierney, due diligence, received compensation, shill, ima, enabling, investors
Comments
This entire house of cards seems to have been held up by others making "referrals" and bringing in more clients. It seems curious that others outside of the company were anxious to have additional investors join this little "party".
Posted by: Anon | June 13, 2006 11:29 AM
According to AJC, 6-3-06, "Before committing, Atwater obtained reports from an accounting firm on IMA's financial statements over a seven-year period, which he concluded were valid." Any idea which accounting firm that was?!!
Posted by: Annonymous | June 30, 2006 8:01 PM