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Government Shutdown Halts SEC Prosecution Of Hedgie Accused of Fabricating Financials, Stealing From Investors

A hedge fund manager who allegedly made remarkable, and fraudulent, promises to his investors – that he would never lose their money – has seen the Securities and Exchange Commission’s case against him stall as a result of the recent government shut down.

Statim Holding’s Joseph Meyer was accused of stealing from his clients after making the “too good to be true” claim, but that case is now in limbo, according to Bloomberg. The SEC had hoped that Meyer would not pull assets from a Statim hedge fund. Meyer refused the SEC’s request, according to a January 17 court filing, and SEC attorneys are now trying to get an injunction to prevent him from withdrawing even more funds. Meanwhile, Meyer through his lawyer, claims that he hasn’t done anything wrong.

His lawyer, Steve Sadow, said: “Mr. Meyer and Statim Holdings Inc. will respond in detail to the SEC’s allegations. But suffice it to say for now that we dispute the allegations, will vigorously contest them in court and look forward to vindication by a open-minded, fair and impartial jury.”

The halt of this case is yet another example of the tangible ways that the government shutdown is preventing federal agencies from doing their job. The Securities and Exchange Commission has stopped opening new investigations and has seen its staff dwindle to just 300 employees, from its normal 4500, as a result of the shutdown.

The hedge fund’s incredible returns, including a year where it allegedly made 91%, had been previously discussed by Bloomberg. The SEC claims that the profits were a result of misconduct, including the fund manager’s propensity to pay his living expenses using investor capital. They also claim that he doctored financial statements.

The SEC’s complaint says: “The purported guarantees and loss protection were illusory. Meyer simply concocted numbers that had no apparent connection to any share class and then reported these exaggerated returns to investors.”

A hearing has been set for February 19 to adjudicate whether or not Meyer can be barred from pulling assets. It had been previously been reported that Meyer was being investigated in Georgia and the SEC opened their case about a week after that report went public.

Meyer’s capital under management is also under dispute. An April 2018 regulatory filing stated that its assets under management were $32.9 million, but Meyer has reportedly told investors that the firm manages hundreds of millions of dollars. In fact, in April 2015, he allegedly told one prospective client that he had $1.8 billion under management.

Meyer had claimed previously that his exorbitant returns were a result of a “computerized trading system” that he designed. He also claimed that most of the fund’s investments were in treasury bonds. His fund returned 24% in 2015, 91% in 2014, and 13% in 2013, according to Meyer, which seems a bit of a stretch for a fund invested in treasurys.

Naturally, the SEC claims that he didn’t own any treasury bonds between late 2013 and August 2016. In fact, as of August 2016, the SEC claims that 33% of the fund was invested in a gold ETF and that 37% of the fund was invested in a 3X S&P 500 ETF. At least he didn’t claim he was using split-strike conversions.

Russia De-Dollarizes Deeper: Shifts $100 Billion To Yuan, Yen, And Euro

Authored by Mac Slavo via SHTFplan.com,

Russia is continuing to ramp up its efforts to move away from the American dollar. The country just shifted $100 billion of its reserves to the yuan, the yen, and the euro in their ongoing effort to ditch the dollar.

The Central Bank of Russia has moved further away from its reliance on the United States dollar and has axed its share in the country’s foreign reserves to a historic low, transferring about $100 billion into euro, Japanese yen, and Chinese yuan according to a report by RT. The share of the U.S. dollar in Russia’s international reserves portfolio has dramatically decreased in just three months between March and June 2018. The holding decreased from 43.7 percent to a new low of 21.9 percent, according to the Central Bank’s latest quarterly report, which is issued with a six-month lag.

The money pulled from the dollar reserves was redistributed to increase the share of the euro to 32 percent and the share of Chinese yuan to 14.7 percent. Another 14.7 percent of the portfolio was invested in other currencies, including the British pound (6.3 percent), Japanese yen (4.5 percent), as well as Canadian (2.3 percent) and Australian (1 percent) dollars.

The Central Bank’s total assets in foreign currencies and gold increased by $40.4 billion from July 2017 to June 2018, reaching $458.1 billion. –RT

Russian and others have been consistently moving away from the dollar and toward other currencies. Economic sanctions, which are losing their power as more countries move from the dollar, and trade wars seem to be fueling the dollar’s uncertainty.

Peter Schiff warns that as the supply of dollars is going to grow and grow, the demand for the American currency can fall, while the US Fed will be unable to stop the dollar’s demise. Schiff says that what is coming for Americans, is massive inflation.

“Eventually, what’s going to happen is it’s going to be the demand for those dollars is going to collapse, not the supply. And when the demand for dollars collapses, then the price of the dollar collapses. You get massive inflation. That is what is coming.”

Russia began its unprecedented dumping of U.S. Treasury bonds in April and May of last year. Russia appears to be moving on from the rise in tensions with the United States. The massive $81 billion spring sell-off coincided with the U.S.’s sanctioning of Russian businessmen, companies, and government officials. But Russia has long had plans to “beat” the U.S. when it comes to sanctions by stockpiling gold.

The Russian central bank’s First Deputy Governor Dmitry Tulin said that Moscow sees the acquisition of gold as a “100-percent guarantee from legal and political risks.”

As reported by RT, the Kremlin has openly stated that American sanctions and pressure are forcing Russia to find alternative settlement currencies to the U.S. dollar to ensure the security of the country’s economy. Other countries, such as China, India, and Iran, are also pursuing steps to challenge the greenback’s dominance in global trade.

New congressional bill would cancel $1.6T in debt held by Federal Reserve

Rep. Ron Paul on Monday introduced legislation that would lower the federal government’s debt by canceling the roughly $1.6 trillion in debt held by the Federal Reserve.

Paul has argued for the last few weeks that the idea represents a quick way to make the growing fiscal crisis more manageable. Under his bill, H.R. 2768, the $1.6 trillion that the Treasury owes to the Federal Reserve would disappear.

The Federal Reserve began buying Treasury bonds in earnest late last year as part of its effort to keep long-term interest rates down. But Paul has argued that Fed purchases of Treasury debt represent a debt that the government owes to itself, and one that also leads to an unwanted and inflationary increase in the money supply.

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