Hot Money Boils Over In IPO Scam

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Four more investors were charged in a civil suit by the Securities and Exchange Commission with a scheme that reaped almost $3 million in illegal profits in the 2004 conversion of a mutual savings bank by paying nominee depositors of the bank to buy shares in the initial public offering for them.

The case also highlights the practice of professional speculators who maintain deposits at numerous mutually owned institutions, including credit unions, in the expectation they will soon go public.

The SEC charged that Jay Slesinger, a 75-year-old Florida retiree and Maurice Servetnick, a 72-year-old retired broker paid Jay Rice, a Connecticut broker and Moshe Ariel shares in the mutual-convert and assign those shares to the investors. They have agreed to repay more than $800,000 without admitting or denying the charges.

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