Former GOP candidate for Oregon governor charged in Facebook IPO fraud
Source: Reuters
A former Oregon gubernatorial candidate was arrested on Tuesday for his alleged role in defrauding investors who had hoped to buy shares of Facebook Inc before its initial public offering in May 2012, federal authorities said.
Craig Berkman, 71, falsely told investors he had access to scarce pre-IPO shares of Facebook and other social media companies such as LinkedIn Corp, Groupon Inc and Zynga Inc, they said in a statement on Tuesday.
But instead of buying shares for investors as promised, Berkman made "Ponzi-like" payments to earlier investors and funded personal expenses, including costs in a bankruptcy case, according to the U.S. Securities and Exchange Commission, which filed a parallel civil case.
The defendant received at least $8 million from various schemes, according to U.S. Attorney Preet Bharara in Manhattan.
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