SEC Claims Dead Money Manager Sold Fake Bonds

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SECThe Securities and Exchange Commission is going after the assets of dead money manager Joel David Salinas, accusing him and his partner, Brian A. Bjork, of defrauding investors of $50 million. The SEC sued Salinas's estate Monday in the U.S. District Court for Southern Texas.

The 19-page complaint alleges that the men created two firms -- Select Asset Management and J. David Financial -- to sell fake bonds. Salinas, founder and president of J. David, and Bjork, chief investment officer of Select Asset Management, offered yields of as much as 9% on the investments. The fraud began in 2004 and ended only recently, according to the lawsuit.

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Salinas died of an apparent suicide on July 17, according to the SEC, and left a note in which he took sole responsibility for the Ponzi scheme.

Texas authorities also took action against Bjork and Select Asset Management. The State Securities Board's inspections and compliance division has filed to revoke their state registrations, claiming that neither Bjork nor Salinas bought the bonds that Bjork sold to his clients.

Investors Include Basketball Coaches

A new twist in the story emerged Monday: At least two prominent basketball coaches lost money in the schemes.

Salinas was a founder of an elite high-school summer basketball program in Houston and a donor to college sports programs, according to a Bloomberg article, and his investors included college basketball coaches Lute Olson, former coach at the University of Arizona, and Scott Drew, coach at Baylor University. Several other coaches may have been defrauded as well.
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