SEC charges Republican billionaire Greg Lindberg of “massive fradulent scheme” worth $75m
“Only weeks ago, Greg Lindberg was released from prison because his (constitutional) rights were violated”, said Lindberg’s spokesperson.
The Securities and Exchange Commission has charged a Malta-based registered investment adviser, Standard Advisory Services Limited, and its two North Carolina-based executives, Gregory E. Lindberg and Christopher Herwig, over an alleged fraud of more than $75 million.
The complaint alleges that from July 2017 through 2018, Lindberg and Herwig, breached their fiduciary duties to their advisory clients by fraudulently causing them to engage in undisclosed related-party transactions that were not in their best interest.
“Massive fraudulent scheme”
Defendants allegedly misappropriated more than $57 million in client funds and Standard Advisory collected more than $21.4 million in advisory fees generated in connection with these schemes.
According to the SEC, Lindberg orchestrated the schemes through complex investment structures and a web of affiliate companies and used the proceeds to pay themselves or to divert the funds to Lindberg’s other businesses.
Osman Nawaz, Chief of the Division of Enforcement’s Complex Financial Instruments Unit, said: “We allege a massive fraudulent scheme, involving unique financial structures and various complex investments, orchestrated by the defendants for their own benefit over their advisory clients’ benefit. Today’s filing demonstrates that the SEC will take action to protect investors from investment advisers who attempt to evade fundamental fiduciary responsibilities.”
Greg Lindberg released from prison earlier this summer
Durham billionaire and political donor Greg Lindberg had been convicted in 2020 by a Charlotte jury of two bribery counts. He was sentenced to more than seven years in prison for allegedly funeling some of the money through the state Republican Party and its then-chairman, former Congressman Robin Hayes of Concord.
Lindber served only 20 months as he was released in June 2022 after an appeals court found that the trial judge, U.S. District Judge Max Cogburn of Asheville, had given the jury improper instructions on the nature of Lindberg’s alleged crimes.
Now, Lindberg faces a new complaint, from the SEC. His spokesperson, law professor and Fox News legal analyst Susan Estrich, said the federal government was “bootstrapping one weak case to another.”
“Only weeks ago, Greg Lindberg was released from prison because his (constitutional) rights were violated. He served 633 days in prison because of this wrongful conviction. But the government, instead of realizing its case had holes, or more likely because it does, came right back with the threat of more charges and more complaints.
“So one day later, not so coincidentally, the SEC weighs in with its civil complaint after being shown millions of pages of documents to prove them wrong. … We showed them bank records to prove where the money went, and to prove that there was no private ‘piggybank’ and that no policyholder ever lost a dime.”
“Mr. Lindberg intends to fight the false allegations that have been made against him, and to strengthen and support his insurance companies and the policyholders here in North Carolina.”
