Thursday, August 06, 2009

DBSI Bankruptcy News
I was sent this link on DBSI. I would not be surprised to see some jail time for some DBSI principals. Here is an interesting couple of paragraphs from the article:

Earlier this year, the Idaho Department of Finance filed a lawsuit accusing DBSI of defrauding investors with a Ponzi scheme. The state also asked the bankruptcy judge to appoint a team of lawyers and forensic accountants to study the company's accounting records.

The judge named Joshua Hochberg to lead that investigation. Hochberg, a former Department of Justice attorney, filed his preliminary report with the court Tuesday. Some of the preliminary conclusions include accounting irregularities, questionable appraisals used to support bond programs, and improper use of loans made to DBSI, according to the report.

The bold and italics are mine. Sponsors issuing debentures are never a good idea, and this information seems to prove that point.

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