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In 1988, the [[U.S. Securities and Exchange Commission]] (SEC) accused Bloom of using his unregistered investment business to collect over $10 million between 1985 and 1988 from over 140 clients for his personal gain.<ref name="NYT01131988"/><ref>{{Cite news | title=Investor, 23, Charged in $10 Million Fraud| work=[[New York Times]] | url=https://www.nytimes.com/1988/01/15/nyregion/investor-23-charged-in-10-million-fraud.html| date=January 15, 1988 | url-status=live}}</ref> Instead of making investments on behalf of his clients, Bloom was accused of acquiring a personal art collection of 40 <ref>{{Cite news | title=Ersatz whiz kid to sell assets to settle SEC case
In 1988, the [[U.S. Securities and Exchange Commission]] (SEC) accused Bloom of using his unregistered investment business to collect over $10 million between 1985 and 1988 from over 140 clients for his personal gain.<ref name="NYT01131988"/><ref>{{Cite news | title=Investor, 23, Charged in $10 Million Fraud| work=[[New York Times]] | url=https://www.nytimes.com/1988/01/15/nyregion/investor-23-charged-in-10-million-fraud.html| date=January 15, 1988 | url-status=live}}</ref> Instead of making investments on behalf of his clients, Bloom was accused of acquiring a personal art collection of 40 <ref>{{Cite news | title=Ersatz whiz kid to sell assets to settle SEC case
| work=[[UPI]] | url=https://www.upi.com/Archives/1988/01/13/Ersatz-whiz-kid-to-sell-assets-to-settle-SEC-case/7475569048400/| date=January 13, 1988 | url-status=live}}</ref> paintings worth $5.5 million, a $1.9 million beach house, an $830,000 condominium in New York and another $800,000 in home furniture and furnishings, more than $732,000 in over 10 bank accounts <ref>{{Cite news | title=SEC Charges 23-year-old investor with diverting $8 million of client's funds | work=The Journal News Metro | url=https://www.newspapers.com/image/163255056/| date=January 13, 1988 | url-status=live}}</ref>, over $230,000 worth of cars including an Aston Martin Valente convertible, a $195,000 diamond and platinum necklace plus a $30,000 pearl necklace, and a reputation as a philanthropist. He made a $1 million pledge to his alma mater, Duke University, giving two gifts of $10,000 each in addition to two paintings, worth $58,500.<ref name="TMG01251988"> {{Cite news | title=The Whiz Kid Who Wasn't | work=[[TIME Magazine]] | url=http://content.time.com/time/subscriber/article/0,33009,966543,00.html| date=January 25, 1988 | url-status=live}}</ref> Notable investors in Bloom's scheme included the [[Sultan of Brunei]], [[Bill Cosby]] and also the [[Rockefeller family]] <ref>{{Cite news | title=Whiz Kid,’ 23, Pleads Guilty to Securities Scam | work=[[Associated Press]] | url=https://www.latimes.com/archives/la-xpm-1988-03-31-mn-1052-story.html| date=March 31, 1988 | url-status=live}}</ref>, many friends of his own parents <ref>{{Cite news | title='Whiz kid' investors get 44 cents on dollar | work=[[UPI]] | url=https://www.upi.com/Archives/1989/08/16/Whiz-kid-investors-get-44-cents-on-dollar/4432619243200/| date=August 16, 1989 | url-status=live}}</ref> and two of his father's business partners. <ref>{{Cite news | title=The Story Behind The Kid's Con Betrayal | work=Daily News Sunday Business | url=https://www.newspapers.com/newspage/434458676/| date=January 24, 1988 | url-status=live}}</ref>.
| work=[[UPI]] | url=https://www.upi.com/Archives/1988/01/13/Ersatz-whiz-kid-to-sell-assets-to-settle-SEC-case/7475569048400/| date=January 13, 1988 | url-status=live}}</ref> paintings worth $5.5 million, a $1.9 million beach house, an $830,000 condominium in New York and another $800,000 in home furniture and furnishings, more than $732,000 in over 10 bank accounts <ref>{{Cite news | title=SEC Charges 23-year-old investor with diverting $8 million of client's funds | work=The Journal News Metro | url=https://www.newspapers.com/image/163255056/| date=January 13, 1988 | url-status=live}}</ref>, over $230,000 worth of cars including an Aston Martin Valente convertible, a $195,000 diamond and platinum necklace plus a $30,000 pearl necklace, and a reputation as a philanthropist. He made a $1 million pledge to his alma mater, Duke University, giving two gifts of $10,000 each in addition to two paintings, worth $58,500.<ref name="TMG01251988"> {{Cite news | title=The Whiz Kid Who Wasn't | work=[[Time Magazine]] | url=http://content.time.com/time/subscriber/article/0,33009,966543,00.html| date=January 25, 1988 | url-status=live}}</ref> Notable investors in Bloom's scheme included the [[Sultan of Brunei]], [[Bill Cosby]] and also the [[Rockefeller family]] <ref>{{Cite news | title=Whiz Kid,’ 23, Pleads Guilty to Securities Scam | work=[[Associated Press]] | url=https://www.latimes.com/archives/la-xpm-1988-03-31-mn-1052-story.html| date=March 31, 1988 | url-status=live}}</ref>, many friends of his own parents <ref>{{Cite news | title='Whiz kid' investors get 44 cents on dollar | work=[[UPI]] | url=https://www.upi.com/Archives/1989/08/16/Whiz-kid-investors-get-44-cents-on-dollar/4432619243200/| date=August 16, 1989 | url-status=live}}</ref> and two of his father's business partners. <ref>{{Cite news | title=The Story Behind The Kid's Con Betrayal | work=Daily News Sunday Business | url=https://www.newspapers.com/newspage/434458676/| date=January 24, 1988 | url-status=live}}</ref>.


Bloom settled with the SEC without admitting guilt <ref>{{Cite news | title=SEC Claims Artful Swindle | work=[[Washington Post]] | url=https://www.washingtonpost.com/archive/politics/1988/01/13/sec-claims-artful-swindle/7448dc06-9c0e-43f1-92d7-9c2b4b9c9f7b/| date=January 13, 1988 | url-status=live}}</ref> and agreed to hand over all his assets to a court-appointed receiver. He also was barred for life from the securities industry; including association with any broker, dealer, investment adviser, investment company, or municipal securities dealer. <ref>{{cite book |author-link=U.S. Securities and Exchange Commission |date=December 4, 1988 |title=U.S. Securities and Exchange Commission Annual Report 1988 |url=https://www.sec.gov/about/annual_report/1988.pdf| location=New York |publisher=[[U.S. Securities and Exchange Commission]] |page=28}}</ref>
Bloom settled with the SEC without admitting guilt <ref>{{Cite news | title=SEC Claims Artful Swindle | work=[[Washington Post]] | url=https://www.washingtonpost.com/archive/politics/1988/01/13/sec-claims-artful-swindle/7448dc06-9c0e-43f1-92d7-9c2b4b9c9f7b/| date=January 13, 1988 | url-status=live}}</ref> and agreed to hand over all his assets to a court-appointed receiver. He also was barred for life from the securities industry; including association with any broker, dealer, investment adviser, investment company, or municipal securities dealer. <ref>{{cite book |author-link=U.S. Securities and Exchange Commission |date=December 4, 1988 |title=U.S. Securities and Exchange Commission Annual Report 1988 |url=https://www.sec.gov/about/annual_report/1988.pdf| location=New York |publisher=[[U.S. Securities and Exchange Commission]] |page=28}}</ref>


Two days after his settlement with the SEC, Bloom was charged by federal prosecutors in Manhattan for violations of the registration and antifraud provisions of the [[Investment Advisers Act of 1940]].<ref name="TMG01251988"> {{Cite news | title=The Whiz Kid Who Wasn't | work=[[TIME Magazine]] | url=http://content.time.com/time/subscriber/article/0,33009,966543,00.html| date=January 25, 1988 | url-status=live}}</ref> Bloom pleaded guilty, waiving indictment,to one count each of mail and securities fraud.<ref>{{Cite news | title=‘Wall St. Whiz Kid’ Given Stiff 8-Year Prison Term | work=[[Los Angeles Times]] | url=https://www.latimes.com/archives/la-xpm-1988-12-10-fi-1381-story.html| date=December 10, 1988 | url-status=live}}</ref> He was sentenced to eight years in prison for defrauding investors of almost $15 million.<ref>{{Cite news | title=Wall St. 'Whiz Kid' Gets 8-Year Term for Fraud | work=[[New York Times]] | url=https://www.nytimes.com/1988/12/10/nyregion/wall-st-whiz-kid-gets-8-year-term-for-fraud.html| date=December 10, 1988 | url-status=live}}</ref>
Two days after his settlement with the SEC, Bloom was charged by federal prosecutors in Manhattan for violations of the registration and antifraud provisions of the [[Investment Advisers Act of 1940]].<ref name="TMG01251988"> {{Cite news | title=The Whiz Kid Who Wasn't | work=[[Time Magazine]] | url=http://content.time.com/time/subscriber/article/0,33009,966543,00.html| date=January 25, 1988 | url-status=live}}</ref> Bloom pleaded guilty, waiving indictment,to one count each of mail and securities fraud.<ref>{{Cite news | title=‘Wall St. Whiz Kid’ Given Stiff 8-Year Prison Term | work=[[Los Angeles Times]] | url=https://www.latimes.com/archives/la-xpm-1988-12-10-fi-1381-story.html| date=December 10, 1988 | url-status=live}}</ref> He was sentenced to eight years in prison for defrauding investors of almost $15 million.<ref>{{Cite news | title=Wall St. 'Whiz Kid' Gets 8-Year Term for Fraud | work=[[New York Times]] | url=https://www.nytimes.com/1988/12/10/nyregion/wall-st-whiz-kid-gets-8-year-term-for-fraud.html| date=December 10, 1988 | url-status=live}}</ref>


Bloom served 5 years out of his 8-year sentence, at the [[Federal Correctional Complex, Allenwood]] in Pennsylvania.<ref>{{Cite news | title=Court Upholds Term for Fraud | work=[[Associated Press]] | url=https://www.nytimes.com/1991/08/27/business/court-upholds-term-for-fraud.html| date=August 27, 1991| url-status=live}}</ref>
Bloom served 5 years out of his 8-year sentence, at the [[Federal Correctional Complex, Allenwood]] in Pennsylvania.<ref>{{Cite news | title=Court Upholds Term for Fraud | work=[[Associated Press]] | url=https://www.nytimes.com/1991/08/27/business/court-upholds-term-for-fraud.html| date=August 27, 1991| url-status=live}}</ref>

Revision as of 07:32, 15 January 2022

David P. Bloom
Conviction(s)December, 1988
Criminal chargeMail fraud, securities fraud, second-degree larceny and scheming to defraud
Penalty8 years in prison, forfeiture of US$13 million, lifetime ban from securities industry

David Peter Bloom is a criminally convicted American fraudster who defrauded investors of almost $15 million in the 1980s.[1][2]

Early career

Bloom, from the Upper East Side of Manhattan, attended Trinity School.[2] He graduated in December 1985 from Duke University with a Bachelor of Arts majoring in art history,[3][4] and returned to New York to start an investment company under the name of Greater Sutton Investors Group Inc.[5][6]

Criminal inquiries and conviction

In 1988, the U.S. Securities and Exchange Commission (SEC) accused Bloom of using his unregistered investment business to collect over $10 million between 1985 and 1988 from over 140 clients for his personal gain.[5][7] Instead of making investments on behalf of his clients, Bloom was accused of acquiring a personal art collection of 40 [8] paintings worth $5.5 million, a $1.9 million beach house, an $830,000 condominium in New York and another $800,000 in home furniture and furnishings, more than $732,000 in over 10 bank accounts [9], over $230,000 worth of cars including an Aston Martin Valente convertible, a $195,000 diamond and platinum necklace plus a $30,000 pearl necklace, and a reputation as a philanthropist. He made a $1 million pledge to his alma mater, Duke University, giving two gifts of $10,000 each in addition to two paintings, worth $58,500.[3] Notable investors in Bloom's scheme included the Sultan of Brunei, Bill Cosby and also the Rockefeller family [10], many friends of his own parents [11] and two of his father's business partners. [12].

Bloom settled with the SEC without admitting guilt [13] and agreed to hand over all his assets to a court-appointed receiver. He also was barred for life from the securities industry; including association with any broker, dealer, investment adviser, investment company, or municipal securities dealer. [14]

Two days after his settlement with the SEC, Bloom was charged by federal prosecutors in Manhattan for violations of the registration and antifraud provisions of the Investment Advisers Act of 1940.[3] Bloom pleaded guilty, waiving indictment,to one count each of mail and securities fraud.[15] He was sentenced to eight years in prison for defrauding investors of almost $15 million.[16]

Bloom served 5 years out of his 8-year sentence, at the Federal Correctional Complex, Allenwood in Pennsylvania.[17]

References

  1. ^ "Consultant, 23, Faces Charge of Mail Fraud : Unregistered Adviser Could Get 5-Year Term". Los Angeles Times. January 15, 1988.{{cite news}}: CS1 maint: url-status (link)
  2. ^ a b "New Yorkers & Co.; Young Name Dropper Wins Riches, and a Date in Court". New York Times. January 18, 1988.{{cite news}}: CS1 maint: url-status (link)
  3. ^ a b c "The Whiz Kid Who Wasn't". Time Magazine. January 25, 1988.{{cite news}}: CS1 maint: url-status (link)
  4. ^ "School to Give Up Art Tied to Stock Scheme". New York Times. January 14, 1988.{{cite news}}: CS1 maint: url-status (link)
  5. ^ a b "Lush Life: Investor, 23, Named in Huge Fraud". New York Times. January 13, 1988.{{cite news}}: CS1 maint: url-status (link)
  6. ^ Blum, David (February 22, 1988). Rich Kid, Poor Kid. New York: New_York_(magazine). p. 48.
  7. ^ "Investor, 23, Charged in $10 Million Fraud". New York Times. January 15, 1988.{{cite news}}: CS1 maint: url-status (link)
  8. ^ "Ersatz whiz kid to sell assets to settle SEC case". UPI. January 13, 1988.{{cite news}}: CS1 maint: url-status (link)
  9. ^ "SEC Charges 23-year-old investor with diverting $8 million of client's funds". The Journal News Metro. January 13, 1988.{{cite news}}: CS1 maint: url-status (link)
  10. ^ "Whiz Kid,' 23, Pleads Guilty to Securities Scam". Associated Press. March 31, 1988.{{cite news}}: CS1 maint: url-status (link)
  11. ^ "'Whiz kid' investors get 44 cents on dollar". UPI. August 16, 1989.{{cite news}}: CS1 maint: url-status (link)
  12. ^ "The Story Behind The Kid's Con Betrayal". Daily News Sunday Business. January 24, 1988.{{cite news}}: CS1 maint: url-status (link)
  13. ^ "SEC Claims Artful Swindle". Washington Post. January 13, 1988.{{cite news}}: CS1 maint: url-status (link)
  14. ^ U.S. Securities and Exchange Commission Annual Report 1988 (PDF). New York: U.S. Securities and Exchange Commission. December 4, 1988. p. 28.
  15. ^ "'Wall St. Whiz Kid' Given Stiff 8-Year Prison Term". Los Angeles Times. December 10, 1988.{{cite news}}: CS1 maint: url-status (link)
  16. ^ "Wall St. 'Whiz Kid' Gets 8-Year Term for Fraud". New York Times. December 10, 1988.{{cite news}}: CS1 maint: url-status (link)
  17. ^ "Court Upholds Term for Fraud". Associated Press. August 27, 1991.{{cite news}}: CS1 maint: url-status (link)
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