Unlicensed Broker Suspected of Conning Dozens of Chareidi Investors


israelThe Israeli Securities Exchange Authority recently handed over to the State Prosecutor’s Office the investigation file on Ilan Morgan, who is suspected of concealing his criminal record in order to obtain a license to manage portfolios, avoiding Securities Exchange procedures and avoiding procedures connected to several of his clients. Morgan, who owns several companies including Morgan Lombard, also allegedly built a fraudulent fundraising setup.Operating in Jerusalem and other locations, Morgan raised hundreds of thousands of shekels from dozens of chareidi clients by using an investment portfolio management license he received from the Securities Exchange through misrepresentation. These activities were carried out in part by brokers he recruited, also through misrepresentation, including ads in botei knesses in the Jerusalem area.

According to reports Morgan raised funds by creating the false impression that money was being invested in a risk-free, high-yield investment (36 percent annually), which induced people to invest money without demanding adequate securities and guarantees.

Investigators are also looking into suspicions that Morgan presented his brokers as licensed investment counselors – though some of them had no investment counselling, investment marketing or investment portfolio management license at all. He also told clients that their money was backed by guarantees to enable its return at any time and created the impression he himself was a very wealthy securities investor, rather than a convict who had served time in a US prison for securities violations.

{M. Green-Deiah veDibur/Matzav.com Newscenter}