Ex-Oregon governor candidate charged in Facebook IPO fraud
NEW YORK (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 (IPO) 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, the United States (US) Securities and Exchange Commission (SEC) said in a statement.
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 SEC, which filed a civil case.
The defendant received at least US$8 million (S$10 million) from various schemes, according to US Attorney Preet Bharara in Manhattan, which filed criminal charges against Berkman.