The SEC alleges that Bluestein specifically targeted potential investors who were retired or elderly and conducted so-called “investment seminars” in Michigan and California to lure them into investing in E-M securities.
The SEC’s complaint, filed in the U.S. District Court for the Eastern District of Michigan, alleges that Bluestein facilitated May’s fraudulent scheme by raising approximately $74 million from more than 800 investors through the sale of E-M securities over five years. Bluestein, through his company Maximum Financial, conducted investment seminars to find new E-M investors.
Bluestein was very methodical and careful not to discuss the E-M offerings openly during these “seminars” in a way that would alert attendees to the fact that they were actually forums to pitch the E-M offerings, the SEC's complaint says. Bluestein first gained the trust of potential investors who attended by discussing generic financial planning topics and other investment products. But under the guise of informal conversations, Bluestein would generate talks among attendees who already had invested in E-M offerings. For instance, Bluestein would often ask if they had “received their Ed May checks?” or “How do you like those Ed Mays?” in order to drum up discussion of the investments and attract the interest of other potential investors attending the seminars.
