Ponta Negra crashes

By Felix Salmon
April 28, 2009

Here is a blog entry I wrote on March 18 but never published. John Hempton was chasing a Ponzi scheme called Ponta Negra, but the fund’s lawyers forced him to take down his entries and I thought it was worth doing some real reporting before flying into the teeth of those selfsame lawyers. I talked to the marketer for Ponta Negra, Jared Toren, who promised to fly up to New York from Texas to show me the fund’s audited accounts.

That meeting never happened: a couple of hours before it was due to take place, I got a voicemail from Toren saying that he couldn’t meet me after all. I was annoyed, and kept on meaning to follow up, but what with the new job and everything I never quite got around to it. Thankfully, however, the SEC was paying attention as well, and now the fund has been busted.

Hempton is now, naturally, all over the story — and he is pushing hard what seems to me to be a rather tenuous connection to the Biden family. But he does get credit for seeing this thing and calling it, long before the SEC indictment came down. I can only hope that more Ponzis will be uncovered this way — and that bloggers and journalists, including myself, will be less cowed by legal threats than they were this time around.

Update: Maybe the Biden connection isn’t as tenuous as I thought, I’m still looking into that.

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