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'Diva of Distressed' takes stand in fraud proceeding

A Wall Street executive with a reputation of "Diva of Distressed" took the stand to testify at a civil proceeding accusing her of fraud. The woman has a reputation for turning distressed companies around and making them profitable.

The Security and Exchange Commission wants the woman to pay back over $200 million and banned from the securities industry. She is accused of cheating investors by not telling them the whole truth about the companies' ability to meet their debt obligations.

A lawyer with the SEC questioned the woman. She maintained that the investors knew that interest, principal and equity upside would be how they would see their gains. The woman owned Patriarch Partners, which is based in New York and is a group of investment firms.

The woman's attorney said that she was worth around $1 billion when the SEC claims the scheme began in 2003. Another attorney for the SEC said the woman let her companies pay less money for interest on their loans and didn't disclose to investors that the payments weren't current.

The woman's attorney said $440 million of his client's own money went into those investment funds and companies. He also said she wasn't paid dividends or fees that she was owed during the two years of the financial crisis.

The case is still ongoing.

When the SEC accuses someone of fraud, he or she needs an experienced attorney by his or her side. This is an extremely complex industry and an attorney's knowledge is of vital importance. If you find yourself facing a civil proceeding initiated by the SEC, you'll need to have an attorney with you who will protect your rights and interests.

Source: CBS News, "Wall Street exec takes stand, defends herself against fraud charges," Nov. 01, 2016

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