They've got muck; we've got rakes. TPM Muckraker
Federal authorities announced at a press conference this morning that Gordon Grigg, a financial adviser from Franklin, Tennessee, has agreed to plead guilty to operating a Ponzi scheme dating back to 1996, in which he stole an estimated $4.9 million from investors.
But along with the US Attorney and representatives from the SEC, Barofsky was also at the press conference. That's because part of Grigg's fraud involved false claims that he was making investments in high-yielding notes issued by the government as part of the TARP.
In the plea deal, Grigg admits that he raised money from investors by promising that he would invest in government-backed commercial paper and bank debt, as part of the TARP program. From the document:
[Grigg] falsely represented to investors that he had already committed more than $5 million in ProTrust pooled client funds towards the purchase of TARP-guaranteed debt as part of a private placement partnership between ProTrust and the investment firms Berkshire Hathaway Inc. and Kohlberg Kravis Roberts & Co.
In fact, the TARP involves no such investment program.
Barofsky was previously an assistant US Attorney for the southern district of New York, which includes Wall Street.