SEC and Prominent 401k Fund Managers exposed in Massive Frauds that cost Investors Billions YEARLY!

The scale of this massive financial fraud makes Bernie Madoff, Allen Sandford and Ken Lay look like choirboys. 

The extent of the SEC's direct involvement is yet to be determined and the law books might need rewriting if regulators are indicted principally owing to their inaction if their direct complicity can not be established, Clearly their charter is to protect the public and they have a duty of care responsibility to be vigilant and to step in when there are clear breaches of SEC rules and cases of fraud. Failure of the SEC to act in respect of the 401k fraud should be seen as criminal as the unsuspecting public has been led to believe that their best interests are being served by giving fund managers billions of dollars yearly.

The magnitude of the fraud on investors is in the multi-billions of dollars - growing massively each year as millions of American give large portions of their wages to 401k Fund Managers - mostly those at the pinnacle of the industry - for their retirement.

Yes you might ask for whose retirement - the investors or the fund managers?

401k Fund Managers are involved in a scandalous campaign of financial disinformation responsible for causing millions of American investors to lose serious Billions of Dollars - apparently unquantifiable due to the enormity of the financial losses and the fact that the damage continues to escalate daily. Until this day the biggest US financial villains have been reportedly:

• Robert Allen Stanford (born March 24, 1950) is a former prominent financier and sponsor of professional sports who is serving a 110-year prison sentence,
• Bernard Lawrence Madoff was born on April 29, 1938, in Queens, New York was sentenced to 150 years in prison for running the biggest fraudulent scheme in U.S. history,
• Kenneth Lay, of  of Enron fame, was convicted of helping perpetuate one of the most sprawling business fraud in U.S. history
  

In the light of the 401k fraud revelations the 3 amigos look like angels and seem rather hardly done by. What fate should await the fraudulent 401k fund managers for the lies they have disseminated concerning 401k loans which have enabled them to enrich themselves extraordinarily at the expense of their client investors - the average wage earner as well as the well heeled upper ladder executives and business owners.

You are probably unaware of what the fraud is at the moment as the fund managers in their press releases, articles and investment recommendations have done a good job spreading the financial myth that borrowing from your 401k is a bad thing. These scurrilous professional charlatans have spent unknown millions cultivating ill-informed poorly educated journalists in to echoing their words along with the entourage of imbecilic or unintelligent financial advisors who clearly failed Economics, and cannot think nor do simple math. 

What exacerbates this perilous fraud on 401k contributors is the impunity the fund management industry has to any inspection by Government Regulators of the tripe it feeds to the investing public in order to purloin billions of dollars from the unsuspecting wage earners and prevent them from gaining more money in the form of bigger tax rebates and Free Money from employers as contributions to their workers 401ks. The cretinish education and lack of any real financial smarts of financial advisors results in the dumb leading the dumber. 

Why do 401k Fund Managers preach that it is a bad move for fund investors to borrow against their account? Fund managers are in fact not dumb. They realise their own earnings might be halved once investors cotton on to the Economic Benefits of borrowing against the value of their 401k accounts. Fund investors in accordance with IRS rules are entitled to borrow 50% of the value in their 401k account - up to a maximum of $50,000.

As the majority of 401k investors do not have more than $100,000 in their account Fund Managers are certainly fearful of losing half of their fund size. After all what will that do for their own pockets? Journalists often trot out potted versions of what Fund Managers have given them extolling the virtues of not borrowing against your 401k; and financial advisors intent on selling products for fees and/or commission based on both contributions and ongoing fund earnings see their own income under threat if their clients remove half of their investments. Thus the conspiracy to defraud 401k investors suits the interests of the major players.

Where is the SEC and the Politicians with this fraud being perpetuated by all and sundry so-called financial Professionals? Chances are they too have a 401k investment but are drinking the kool-aid also!

QUESTION: Who is going to speak up to expose this gigantic financial fraud? ... certainly no one within the funds management industry, not the regulators and you guessed it ... No Politician!

Why is this an important issue? Frankly if the truth be known the Good Ship USA is not sailing well at all. With a National Debt fast approaching the $18Trillion Mark there are serious misgivings about the ability of the Government being able to continue with its Social Security System in to the future. 

There is a definite need for every citizen to provide for their own retirement and they should not be anticipating that a Government Pension will be able to sustain their life in retirement. Hence the Fund Managers and Financial Advisors have set themselves up to fleece the public in the pretense of helping workers manage their earnings in such a way as to solve the retirement problem. 

How do I know the Fund Managers are perpetrating a financial crime while the SEC and others can not see it?

•  I am a trained Economist, Financial Planner and Tax Lawyer,
• Once I was a member of the club: not only did I manage investment funds for Insurance Companies but I designed some of their products and trained financial advisors and insurance agents in selling the products.

Why am I exposing the wrongdoings now?

• Partly as a matter of conscience and.
• because there are clearly far better investment results to be had by employing the economics of leveraged investing - which 401k loans facilitate,
• The bad advice from Fund Managers is causing the Public to miss out on enormous amounts of money and severely jeopardizes the likelihood of them being able to amass sufficient money for the grey years of retirement

While engaged as a Financial Economist I specialized in developing leveraged strategies as a way for people with little or no money for investing to seriously improve their financial position - in a matter of just a few short years. Most of the programs combine the attractiveness of compound exponential growth of capital provided free or with major contributions for the Taxman. 

You often hear professional investors advocating the benefits of using Other Peoples' Money - and the few more astute financial advisors who also promote such investment strategies. The 401k Retirement Plan is the epitome of what leveraged investment strategies can be.

For example: Starting with the average worker - they have no money to invest. In most instances they have a mortgage on their home which will run for 30 years and which they are unable to pay down any sooner than will happen if it is left to run its term. Often this gets even worse - as most families move every 7 years, sell their existing residence for little or no gain and purchase a new home, taking on a new mortgage set to run for another 30 years.

Most Employers encourage their workers to contribute to a 401k plan by offering to match their contributions with a 100% employer contribution or at least a 50% matching contribution. Why on earth are employed workers not taking massive advantage of such a glorious financial opportunity to get FREE Money? 

The Answer is "IGNORANCE" - not just their own ignorance of financial matters, economics and math, but alarmingly the ignorance of the financial advisors on whom they rely for financial advice - against the back drop of lies spread by Fund Managers intent of preventing investors accessing their own money for economic advantage. The logic of some fund managers seems to be if 401k investors become financially better off they will not need to contribute so much and thus the fund managers will have less money to manage. The majority of profiteers do not want to see their funds under management diminish as that is how they make their money!

In a recent article I disposed of the myth which some advisors are promoting - of not resorting to a 401k loan to solve a Credit Card problem. Where there are hefty interest rates on your credit card which you are unable to swap for a zero interest card from a competitor a 401k loan can produce around a 25% investment return on the money you use to extinguish the debt. This return is risk free as not paying interest saves you money - so there is a guarantee of the resultant ROI.

To read the full article click here

With a matching contribution available from an employer even the lowliest worker should gopher it! However the reality is the average worker is unable to save enough to be in a position to contribute more than a few dollars each month if at all. The maximum contribution a worker can make to a 401k is $18,000 a year until they are age 50, after which that figure can be increased by a further $6,000. So it should make perfect sense to anyone serious about free money to grab as much of it as possible - even if it means resorting to borrowing on your credit cards.

For the example say you are well under the 50 years of age. Lamentably you do not have any financial education and your dumb-ass financial advisor does not have a clue. They certainly frown on using your credit card except of course if you are buying them lunch! 

• Here is a simple set of steps YOU can take - as all it requires initially is for you to grab enough credit cards on which you can borrow $18,000 in total so you can make the maximum contribution to your 401k plan. There are smart ways to use your Credit Cards so you do not get hit by exorbitant interest charges (which a professional accountant should be able to show you) - but even if you do need to pay those high rates it is still an economic proposition to do so.
• Once you have the $18,000 from your credit cards, by plonking the full amount down in to your 401k the IRS rewards you with a tax reduction of $5,200. Day one that amounts to an immediate investment return after tax of 42% (there is no immediate incidence of tax when the taxman gives you money but later on when you retire expect to feel their hand in your pocket) - the return even factoring in deferred tax still is certainly a lot more than any current interest rate on credit cards.
• Your Employers matching contribution should be $18,000. (If not then there is reason for you to seek an alternative employer). For some workers this amounts to more than a 50% increase in their wage. While you can not direct go to your boss and say Give Me a 50% Salary increase, you can obtain the same wage boost by putting Other Peoples Money in to your 401k and thereby require your employer to Give You The Money!
• Once there are the two contributions in your 401k - one from yourself, the other from your employer - there is $36,000 sitting there, of which you can borrow half. So go ahead and take out $18,000 to pay back the debt on your credit card. You will then have zero credit card debt but owe yourself $18,000. And have your employers contribution sitting in the 401k producing a market return compounding until your retirement.
• The $18,000 401k loan is money you owe yourself. You are required to pay yourself 5% interest (which you put in to your 401k fund as form of forced savings)  ** This is a really dumb game as the moment the 5% payment hits your 401k you are able to take half of it out - so it cost you only 2.5% - and then you must pay 5% to yourself on the 2.5% you take out, amounting to 0.0125%. Don't even worry though about where to find the 5% initially as your fund should be earning at least 5% on the money which remains invested in your account - so you can take out half of that and then pay it back so you owe 2.5% still but can borrow back half the previous repayment, which you then put back in and repeat the process and on and on - Did you like that game?)
• It is not necessary for you to be able borrow $18,000 on your credit cards first up - the maximum yearly contribution in to your 401k - to be able to start on the 401k road to making money; you can break things down and proceed incrementally on a monthly basis if you are limited by what you can obtain via credit cards. Also you might look at using a revolving line of credit financed on the build up in equity in your home or a few more creative ways if you care to contact myself - please send a Connect request followed by a message saying you want in on the 401k trip
• You should see from the above it does not require that you are able to save any of your wages in order to participate in the substantial benefits of a 401lk in the manner approved by the IRS. And the loan facilitated makes it all possible using OPM (other peoples money), borrowing back and repaying what you borrow on a routine basis.
• If a 401k loan is taken as designed every investor is able to pick up for no money out of their wage or savings $5,200 a year from the IRS and $18,000 a year FREE Money from their employer. However with Funds Managers disseminating garbage financial advice to dissuade investors from taking out 401k loans there is a financial fraud which they get away with - trapping investment money in the coffers of the fund management company and lining the pockets of financial advisors. 
• Financial Advisors are lured in to this conspiracy to defraud investors of billions of dollars yearly as the advisors earn their money not only on the initial contributions made by their clients in to 401k funds but also from trailing commissions and fees based on the value of the funds within the vehicle.
• Fund Managers and Advisors are visibly in league using spurious arguments to dissuade investors from accessing the legally available 401k loan for fear of the perceived result - being that the fund size, and accordingly fees and commissions will halve if investors borrow back the maximum 50% in their accounts.
• As a consequence of following the fraudulent rhetoric investors miss out on the billions of dollars they could access and the subsequent retirement  fortunes of which they are deprived. In failing to borrow back contributions to reinvest they miss out on the tax rebates which IRS would have gladly provided had they maxed out their 401k contributions and the investor also misses out on the employer contributions which would have been paid in to the employees 401k
• Both Fund Manager and Advisors in their blinkered greed end up shooting themselves in the foot. In seeking to prevent any diminution of their perceived own incomes they use fraudulent arguments and provide bad advice to their clients in order to prevent investors maxing out contributions, which otherwise would significantly magnify the size of investor 401k accounts, ramp up fund size for the Fund Managers and actually increase the commissions and fees for advisors.
• The treacherous conspiracy of those who have a duty of care and fiduciary responsibilities to investors costs their clients billions of dollars and also results in their own sub-optimizing of profits.

If you are a Fund Manager or Financial Advisor who would care to improve your own profits and the financial position of your clients and investors you may avail of training and consulting services which I only provide to honorable business professionals.

• In which case CONTACT Me - by sending a Connect Invite followed by a Message with the Magic Word "HONOR"