Last year, investors banked heavily on Craig Berkman, one of the first financiers to offer Facebook’s highly coveted IPO shares. However, the 71-year-old has allegedly pocketed the investments—which amounted to $8-million—to pay debts and fund personal expenses.
According to reports, Berkman was arrested today for defrauding investors. Other sources also claimed that the former gubernatorial candidate told investors that he had access to other tech company shares, including LinkedIn and Zynga.
Last summer, the United States Securities and Exchange Commission began investigating Berkman’s alleged payment scheme. The regulator has since filed a civil case against Berkman.
A representative from SEC said that Berkman capitalized on the highly anticipated IPOs of Facebook and social media companies to con investors.
Berkman is also facing charges pressed by US Attorney Preet Bharara for two counts of securities fraud and two counts of wire fraud.