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The Securities and Exchange Commission (SEC) announced an emergency action against Nikolai Battoo, an asset manager with BC Capital Group who touted extraordinary investment success during the financial crisis while purportedly exaggerating the amount of assets he manages and concealing major investor losses. According to the SEC's investigations, Mr. Battoo claims to manage $1.5 billion for clients from around the world, including $100 million for clients in the United States. Despite Mr. Battoo's declared track record of extraordinary returns for his clients, he suffered losses in 2008 because of his investments in the Bernard Madoff Ponzi scheme and a derivative investment program that went sour.

A Ponzi scheme is an unsustainable fraud pyramid that inevitably ends in ruin. Schemers use money raised from latter investors or investors higher up the pyramid to pay an earlier investor's returns. Ponzi schemes invariably fall apart when markets deteriorate or when the schemer is unable to raise more cash. A derivative is a financial instrument whose value is based on one or more underlying assets. The most common underlying assets include commodities, stocks, bonds, and currencies. Derivatives function as a contract between two parties that specifies conditions such as the dates and resulting values of the underlying variables under which payments are to be made between the parties. The most common types of derivatives forms are forwards, futures, options, and swaps.

Mr. Battoo continued to overstate the value of his investments instead of admitting losses to investors. In fact, Mr. Battoo was able to attract new investors by simply claiming that he has been able to beat the benchmark. However, during recent months, Mr. Battoo's clients have demanded redemptions on their investments. Rather than pay his clients, Mr. Battoo has provided nothing but excuses ranging from the collapse of MF Global to a hold on his clients' money due to an ongoing government investigation.

Have you been unsuccessful in recovering money invested with Nikolai Battoo at BC Capital Group? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation.

The most important of investors' rights is the right to be informed! This Investors' Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 30 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors' rights throughout the United States and internationally! Please visit our website,, post a comment, call (800) 732-2889, or email Mr. Pearce at for answers to any of your questions about this blog post and/or any related matter.