On June 24, 2025, the SEC issued a press release announcing a jury verdict against Thomas F. Casey for securities fraud. The jury found Casey liable for orchestrating a scheme that resulted in the loss of millions in retirement savings from more than 200 investors.
While the facts are alarming, they also provide a clear, real-world case study of what constitutes unlawful conduct in private securities offerings. For those involved in raising capital—particularly from unsophisticated or retirement-age investors—this case serves as a powerful reminder of the legal and ethical responsibilities involved.
Below is the key portion of the SEC’s statement. After reading it, see how many securities law violations or red flags you can identify. Then, review the breakdown that follows.
SEC Statement Excerpt:
“We are pleased with the jury verdict holding the defendant liable for orchestrating a fraudulent securities offering, which targeted retirees’ retirement accounts with false promises of safety and security. The defendant induced more than 200 people to invest a total of over $10 million into Golden Genesis, a venture to supposedly create blood banks for selling human plasma from young donors for anti-aging treatments, based on false claims including that the investments would generate guaranteed high returns and be secured by the company’s assets. In reality, the funds were not secured and the defendant used investor funds to compensate himself and to prop up the scheme by paying back other investors, causing approximately $8 million in losses to the victims. As this trial demonstrates, the SEC is committed to protecting retirees’ hard-earned savings and holding the perpetrators of frauds involving retirement funds accountable.”
How Many Violations or Red Flags Can You Spot?
Take a moment to consider the legal and ethical missteps described above. Then compare your observations with the analysis below.
Key Securities Violations and Red Flags:
- Fraudulent Securities Offering
This is the central finding of the case. Selling securities and then not using the funds raised for the stated purpose of the investment is a deceptive practice, which is a direct violation of the Securities Act of 1933 and the Securities Exchange Act of 1934. - Targeting Retirement Accounts
Soliciting funds from retirees—often relying on their IRAs—triggers heightened fiduciary and regulatory responsibilities. Exploiting this demographic can lead to enhanced penalties and greater scrutiny. - False Promises of Safety and Security
Claims that an investment is “safe” or “secure” are misleading unless clearly substantiated. An example of a “secured” investment would be a private loan recorded in the chain of title for a real property; LLC investments generally do not fall in this category. Such representations often violate antifraud provisions under Rule 10b-5. - Guaranteed High Returns
Promising returns that are both “guaranteed” and “high” is a well-known hallmark of fraudulent schemes. No legitimate private investment can lawfully promise guaranteed profits, that is, unless you have personal funds set aside to pay back all investors in case the deal fails. - Claims of Collateral That Didn’t Exist
Representing that an investment is backed by assets when it is not is a material misstatement that deceives investors about the true risk. - Misuse of Investor Funds
Diverting investor capital for personal enrichment or unauthorized purposes, such as compensating oneself, constitutes embezzlement or misappropriation. - Ponzi-Like Repayment Tactics
Using funds from new investors to pay earlier investors is a classic Ponzi scheme and is inherently unsustainable and deceptive. - Significant Investor Losses ($8 Million)
The scale of financial harm—especially when concentrated among vulnerable individuals—can escalate the severity of sanctions, including potential criminal liability.
Why This Matters
Cases like this are not simply cautionary tales—they represent real harm to individuals who trusted someone with their life savings. As professionals involved in securities offerings, we must hold ourselves and others to the highest standards of transparency, disclosure, and legal compliance.
Understanding where this offering went wrong is essential to ensuring that your own practices—and those of your entire management team—do not cross legal or ethical lines.
