Samuel Nathan Kahn: A Scammer? (2024)

Originally Syndicated on May 14, 2024 @ 5:25 am

In a boiler room conspiracy, a counterfeit trader by the name of Samuel Nathan Kahn was a significant actor. This scheme included selling worthless business shares to 800 victims to cheat them out of a total of £ 3.7 million. The following is a list of the specifics of the story:

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Samuel Nathan Kahn: Charged £1.09 million for share acceleration and market manipulation

As a result of his participation in a “boiler-room” scam, the Financial Services Authority (FSA) has fined Samuel Nathan Kahn a total of 1.09 million pounds for share ramping. This comes three years after the FSA declared him bankrupt owing to his role in the scheme. 

Market Abuse and Manipulation of Global Brands Licensing (GBL)

Nevertheless, the regulator concluded that there was insufficient evidence to warrant a criminal prosecution, even though many abuses were committed, including claiming to be purchasers of shares and manipulating share prices. The penalty was agreed upon by Kahn to be paid.

Because convictions for insider trading are very difficult to obtain, the Financial Services Authority (FSA) instead obtained an injunction from a high court that would ban Kahn from participating in any further market abuse. If he continues to abuse others, he might be sent to prison.

In the beginning, the FSA looked into Kahn’s involvement in actions that took place in international boiler rooms. In addition to being forty years old, Kahn lives in Salford.

In October 2007, he admitted his culpability about over 800 investors in the United Kingdom who had filed claims totaling 3.7 million pounds. On the other hand, he eventually enrolled in an IVA, which allowed him to avoid making a payment.

To be able to balance the whole amount of his investor debt against his estate, the Financial Services Authority (FSA) declared Kahn bankrupt in the year 2008.

The administration of Kahn’s business was untouched by the bankruptcy. On the Plus stock exchange, the share price of a very small company known as Global Brands Licensing (GBL) was fraudulently inflated by Kahn in March 2010. This occurred during what the Financial Services Authority (FSA) referred to as a “month-long campaign of market abuse.” 

A move by the FSA 

After purchasing a substantial quantity of GBL shares for 2 pence a share, Kahn allegedly pretended to be other traders to give the impression that there was genuine interest in the company. This is according to the Financial Services Authority (FSA). As a result of his activities, the price of GBL shares achieved a high of 5.25 pence in only four weeks, more than doubling from its previous level.

According to the findings of the FSA investigation, Kahn manipulated 85 percent of the buy transactions and 91 percent of the sell trades of GBL to obtain financial advantage, as well as to promote tax relief fraud and activities that took place in boiler rooms. 

It has been reported by the Financial Services Authority (FSA) that Kahn often claimed to be someone else while making orders to trade GBL’s shares and coordinating trading by third parties. This was done to disguise his participation in the scam. “Kahn orchestrated and controlled the vast majority of the trading in GBL’s shares in March and April 2010,” according to the reporting organization.

Based on the findings of the Financial Services Authority (FSA), it was determined that Kahn had requested that the profits he made from this trade be transferred to him in cash from the bank account of a third person.

The rogue trader allegedly claimed to be an employee of a legal charity to take advantage of the tax advantages that were available to them. But on April 30, 2010, his goals were dashed when the Plus exchange discontinued trading in GBL. His objectives were dashed.

An injunction against Kahn has been obtained by the Financial Services Authority (FSA), which is the first order of its kind that the regulator has won. Due to Kahn’s long history of inappropriate conduct and the fact that the FSA has already taken disciplinary action against him, the FSA deems his behavior to be very severe.

The Financial Services Authority (FSA) has made the following statement in her capacity as temporary head of enforcement and financial crime: “The FSA will not tolerate this type of repeat behavior and will use all of our powers to ensure credible deterrence.

However, other experts disagreed with this and urged that the watchdog should focus on avoiding more widespread market abuse. According to the data that the watchdog gathered, there is still the possibility of market misuse occurring in around one-third of all takeovers in the United Kingdom.

The extraordinarily high fine that was calculated on the new punitive basis was also mentioned by Simon Morris, who works for the legal firm CMS Cameron McKenna. Morris said that this is a first for the Financial Services Authority (FSA). This is a typical example of a fringe operator breaching the law, which is something that happens rather often.

Since the FSA has signaled in the past that extensive insider trading is frequent, especially in the new issue market, there is still a potential that the City may not take the message seriously until it investigates the matter.

Samuel Nathan Kahn: Final FSA notification 

Sanctions against Samuel Nathan Kahn

The Financial Services Authority (FSA) sent Samuel Kahn a Decision Notice on April 15, 2011, alerting him that the FSA had decided to penalize him with a punishment of 1,094,900 pounds for engaging in market abuse following the definition of the word that is provided by the legislation, which is found in the Financial Services and Markets Act of 2000.

The following are the components that make up the penalty:

(a) the disgorgement of the financial gain that resulted from the market abuse, which amounts to a total of £210,563.22 (excluding interest), and which reflects the financial gain that Samuel Nathan Kahn obtained as a consequence of the conduct that is stated in this Notice.

(b) an extra fine of £884,365, once the previously specified settlement discount has been subtracted from the total amount.

Per the rules, the Financial Services Authority (FSA) rounds down final penalty amounts to the nearest £100, which results in a monetary penalty of £1,094,900.

Samuel Nathan Kahn: Case history 

Between the dates of 24 March and 30 April 2010, it was revealed that Mr. Kahn had devised a course of action to manipulate the stock shares of Global Brands Licensing (GBL), a company that is traded on the PLUS Quoted market.

Furthermore, he coordinated transactions for other individuals (Private Investors) and made buy orders in his name. This was in addition to the fact that he placed much purchases and sell orders for GBL stocks on behalf of both Charity A and Company B.

This trading accounted for a large amount of GBL’s share activity during that period, and Mr. Kahn’s objective was to manipulate the market by artificially increasing the share price on purpose.

He placed orders on behalf of Charity A and Company B by claiming to be a director or trustee of Charity A, although he had no formal link with either organization. This was done by him because he wanted to conceal the strategy and his role in it more than anything else. Although the strategy caused a large increase in the price of GBL shares, which eventually reached a high of 5.25 pence, trading in GBL shares was ultimately suspended owing to unusual activity.

Mr. Kahn was able to accumulate a direct cash gain of 210,563.22 pounds as a result of the program via the selling of Company B. As part of the plan, which also involved additional boiler room operations, a sizeable portion of GBL’s shares were given away to charitable organizations that are known to the government. This action was taken to take advantage of tax deductions.

The Financial Services Authority (FSA) regarded Mr. Kahn’s actions as very severe since they were deliberate and had a major influence on the market. He had a history of transgressions in the past, and the Federal Securities Administration took all of these factors into consideration when determining the appropriate monetary punishment.

Under the Financial Services and Markets Act of 2000 (FSMA), the Financial Services Authority (FSA) is authorized to impose a monetary penalty for activities that constitute market abuse. Acts that generate a misleading or deceptive picture of the price or demand for qualifying investments are considered to be market abuse, according to section 118(5) of the Financial Services Modernization Act (FSMA). Mr. Kahn’s acts were considered to constitute market abuse.

In consideration of the seriousness of Samuel Nathan Kahn’s acts and the amount of money he gained, the Financial Services Authority (FSA) decided to levy a fine of 1,094,900 pounds against him. Disgorging the monetary gain that was acquired and taking into consideration both aggravating and mitigating conditions were included in the five-step process that was utilized to decide the penalty.

The financial penalty will be lowered by thirty percent if Samuel Nathan Kahn decides to settle the issue without further legal action. If the penalty is not paid in full by the deadline, the Internal Revenue Service (FSA) may pursue legal action to recover the amount that has not been paid as a debt.

Furthermore, the Financial Services Authority (FSA) has the authority to disseminate information about the situation, which they intend to carry out properly while taking into account the concerns of consumers and maintaining fairness. 

Conclusion

The participation of Samuel Nathan Kahn in a boiler room conspiracy and the consequent market manipulation of Global Brands Licensing (GBL) shares resulted in major financial fines and regulatory action taken by the Financial Services Authority (FSA). In conclusion, the FSA made these decisions. 

Through his premeditated activities, which included organizing transactions under pretenses and distorting share prices, Kahn was able to amass a large amount of financial advantage for himself, while at the same time inflicting damage to investors and the integrity of the market. 

Kahn’s situation serves as a vivid reminder of the terrible penalties that may result from participating in fraudulent operations inside the financial sector, although he is subject to fines and restricting regulatory constraints.