Financier ‘facing trial in US over £60m scam’
A BRITISH financier faces extradition to the US for allegedly masterminding a share price-fixing scam that cheated investors out of nearly £60 million.
Venture capitalist Ronald Bauer, 47, is accused of leading an elaborate ‘pump and dump’ fraud that involved secretly acquiring large amounts of stock in publicly traded companies in the US.
The suspects allegedly made millions by selling on the shares at ‘artificially inflated’ prices to unsuspecting victims after manipulating the market.
Cambridge University-educated Bauer, from west London, used shell companies around the world to orchestrate the racket, according to court documents.
He and his co-accused manipulated the markets by coordinating trades and running mis£8million leading promotional campaigns to con victims around the world, the documents allege.
The prosecution documents filed in the Southern District of New York state: ‘Bauer was the leader of the stock manipulation schemes in which he participated and controlled the various aspects of the schemes.’
In a ‘pump and dump’ scheme, fraudsters usually spread misleading information to create a buying frenzy that will artificially inflate the price of a stock, before ‘dumping’ their shares at inflated prices.
Bauer, who runs several investment firms, faces five counts of conspiracy to commit securities fraud, one count of conspiracy to commit wire fraud, one of wire fraud and one money laundering charge.
He is on £250,000 conditional bail, has been forced to wear an ankle tag and has surrendered his UK and Canadian passports until his next extradition hearing at Westminster Magistrates’ Court on June 20.
The financier must stay at his five-storey Kensington mansion, which has a gym and two reception rooms. Bauer bought the home, on a tree-lined street close to the restaurants and shops of Knightsbridge and Belgravia, with his wife for £5 million in 2010.
The court documents state: ‘While on paper the defendants and their co-conspirators had no connection to these companies, in reality they exercised substantial control, including installing management at the companies, financing the companies’ operations and funding payments for attorneys in order to prepare public filings.’
The fraud is said to have involved Bauer and nine other financiers.
Bauer and three other suspects – Daniel Ferris, 40, a Briton who lives in Monaco; Craig Auringer, 40, a Canadian who lives in London; and Petar Mihaylov – are said to have made about £59 million from the scam. The four face the possibility of 20 years in prison for each charge, following an investigation by the FBI and US Securities and Exchange Commission.
A source said Bauer was arrested on April 7 at Heathrow after arriving back from Dubai.
Mihaylov was arrested in Bulgaria, Auringer is understood to have been picked up in Spain and Ferris is said to be still at large. Other suspects have been arrested in Canada, Spain and the Bahamas.
‘They created a buying frenzy’