Facebook Scheme: Man 'Stole' $8M From Clients
A Florida investment adviser has been charged in New York in an $8m securities fraud scheme that exploited demand for shares of the social networking site Facebook.
Craig L Berkman, 71, was arrested on Tuesday at his home in Florida and detained pending a hearing set for Thursday.
He was charged with falsely claiming in December 2010 to own shares of Facebook Inc, well before the company went public last year.
In reality Berkman did not directly own shares, and prosecutors say he stole much of $8m (£5.3m) that more than 50 investors entrusted to him.
The US Securities and Exchange Commission has also announced separate civil charges.
The government said Berkman operated a private company called Ventures Trust II LLC.
Facebook went public in May with its much-hyped $104bn (£65bn) IPO.
But the company's value dropped soon after, with shares quickly falling from their debut price of $38 (£25.16).
On Tuesday the stock's value closed at $26.55 (£17.58).