Shawn Baldwin, a Chicago investment manager, is charged with eight counts of wire fraud. Baldwin, who owns a number of investment-related firms, is accused of fraudulently obtaining over $10M from at least 17 individual investors and corporate lenders between 2006 and May 2017.
According to the criminal indictment accusing him of financial fraud, Baldwin made false claims about his professional success and connections, including that his firm was affiliated with professional advisors and compliance officers with whom it, in fact, had no ties. He also allegedly misrepresented the seriousness of disciplinary actions that he had been subject to by regulators. Among these were that he was permanently barred from offering investment advice or securities in the state of Illinois, as well as that the Financial Industry Regulatory Authority had taken away his professional registrations eight years ago. In 2006, the National Association of Securities Dealers barred his firm, CMG Institutional Trading, for failing to meet the US Securities and Exchange Commission’s requirements regarding capital.
Baldwin is accused of telling investors that their money would go into investment products when, in reality, he allegedly used their funds for his own use. He purportedly tried to hide his investment scam by generating fraudulent account statements that didn’t accurately reflect the value of customers’ funds. He also made it appear as if he was involved in profitable business deals and was setting up new contacts that would lead to money from IPOs. In truth, claim prosecutors, Baldwin knew he wouldn’t be able to pay back investors because he had either spent or lost their money.