Fong's 1990 SEC Troubles and Miami Herald Exposure:
Equitex’s chairman and chief executive, Henry Fong, was investigated by the Securities and Exchange Commission in 1990. “Fong, a Jupiter [Florida] resident and philanthropist, knows his way around money. As people rushed in to buy Equitex shares, Fong cashed out selling more than a third of his 1.6 million shares as the stock peaked. Back to the philanthropist Fong – the one who sold one-third of his stock in Equitex to investors clamoring to get on the Internet bank band wagon. The Miami Herald wrote, “According to a 1990 complaint filed by the SEC, Fong took part in an $8 million stock manipulation scheme involving newly minted shares of Star Publications. The story made the rounds as business journals drove home the problem of penny stock fraud. But the SEC case against Fong went nowhere, and it was dropped when Fong agreed to return $73,775 in profits.
In 1999, Duffy wasn’t concerned about Fong’s past, telling the Miami Herald, “I’m the one who put the deal together and Henry Fong has been true to his word. I have no problem with the guy. I think he’s one of the most trustworthy guys in South Florida.” Duffy forgot all about that statement two years later when he was fired, locked out of his offices, and removed as chairman in November 2001. Outraged at his treatment, Duffy sued the bank and received a judicial order on February 8, 2002, putting him back in charge and barring the new board from running the bank.
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