Insurance-based investment scheme labelled Ponzi, closed down

Insurance-based investment scheme labelled Ponzi, closed down | Insurance Business Australia

Insurance News

Insurance-based investment scheme labelled Ponzi, closed down

Harvard alumni set sights on peers, others as he claimed to be able to identify Berkshire Hathaway stock buys

Insurance News

By
Matthew Sellers

Imagine that you could tell just what Warren Buffet’s Berkshire Hathaway was going to buy next – and being able to pick up those stocks before the investing behemoth made a move and made their value jump?

That’s just what one Harvard Business School MBA graduate, Vladimir Artamonov, claimed, but a New York court has intervened to halt what it claims is a fraudulent scheme. Artamonov is accused of misappropriating over $2.9 million from investors, including his peers from the institution.

The operation was exposed following the tragic suicide of an investor who had lost $100,000, prompting action from New York Attorney General Letitia James.

James announced on Thursday that her office obtained a court mandate to immobilize Artamonov’s assets, underlining that even Harvard MBAs can fall for sophisticated financial scams that exploit personal and professional networks for trust.

“Even sophisticated investors can be conned by fraudsters, especially when personal relationships and networks are used to build a false sense of trust,” James remarked. She detailed how Artamonov leveraged his Harvard alumni status to deceive at least 29 investors by promising astronomical returns through his Project Information Arbitrage fund.

This venture falsely claimed it could return 500-1,000% on investments by predicting Berkshire Hathaway’s investment moves from public insurance filings, yet it primarily engaged in purchasing high-risk short-term options leading to rapid capital depletion.

“Artamonov boasted to his investors that it is like ‘having a private time machine’ and ‘getting tomorrow’s newspaper today’,” as he projected massive investment returns, NY Attorney General Letitia James’ office said.

“Artamonov also used his investors’ money to fund unauthorized personal expenses for vacations, shopping, and dining,” it continued.

“We just found out about this earlier today. We have no additional comment,” Mark Cautela, head of communications at Harvard Business School said in an email to CNBC.