SEC sues duo who ran alleged $300M Ponzi scheme

The U.S. Securities and Exchange Commission sued two Canadian men, accusing them of running a $300 million Ponzi scheme that promised returns of as much as 36 percent on investments in gold-mining companies. Milowe Brost, 56, and Gary Sorenson, 66, diverted the savings of more than 3,000 investors through shell companies from at least 1999 to 2008, using millions of dollars to buy homes, ranches and a South American fishing resort, the SEC said today in a federal court filing in Seattle. Brost and Sorenson held seminars where they presented themselves as financial educators who had discovered investment opportunities in gold mining, according to the SEC. The two men, who also face fraud allegations from Canadian regulators, paid purported returns with money raised from new investors until the scheme collapsed, the SEC said. “Brost and Sorenson orchestrated a complex, far-reaching fraud disguised by a labyrinth of companies and foreign bank accounts they used to hide their misconduct from investors and law enforcement,” Donald Hoerl, director of the SEC's regional office in Denver, said in a statement. Glenn Solomon, an attorney at May Jensen Solomon LLP in Calgary who the SEC said represents Solomon, said he wasn't aware of the SEC's case. Calls to Canadian telephone listings for Sorenson and Brost failed to reach the two men.