Lennar Corporation (NYSE: LEN) saw its shares plummet nearly 20% last Friday after Barry Minkow's Fraud Discovery Institute alleged that the homebuilder was improperly inflating its balance sheet, but the company isn't taking his inflammatory claims lying down. The beleaguered housing issue announced today that Minkow and his Fraud Discovery firm have been named as defendants in "a lawsuit alleging libel, extortion, and various criminal acts."

The official company statement reveals that Minkow & Co. are being added to a pre-existing lawsuit filed againt Nicolas Marsch III, who is accused of "hiring Minkow and his company to use any means available, including fraud, identity theft and manipulation of securities markets, to wrongfully and falsely harm Lennar's business and reputation because Lennar refuses to accede to Marsch's demands for tens of millions of dollars."

Unfortunately for Lennar, its dramatic rejection of Minkow's allegations isn't doing anything to boost its share price. The equity lost 8.8% today, easily outpacing the decline in the broader equities market. LEN has now shed roughly 31% since last Friday.

Meanwhile, in the options arena, put volume continues to dominate -- during the past 10 days, traders on the International Securities Exchange have bought to open 2.6 puts for every call. This ratio is hovering just 15 percentage points from an annual bearish peak.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.

Lennar Corp. gets litigious with Minkow as stock's slide persists originally appeared on BloggingStocks on Wed, 14 Jan 2009 16:41:00 EST. Please see our terms for use of feeds.

This post is part of a feature in which he wonder whatever happened to some notorious financial felons. See all 17.

Barry Minkow was one of the youngest people to ever take a company public in the United States. He is remembered not for that feat, but for the massive financial fraud he committed via his company ZZZZ Best Co., Inc. The stock of the carpet cleaning company once had a value of $300 million, but it all came crashing down in the late 1980s.

Minkow and a few associates successfully fooled financial statement auditors into believing the company had millions of dollars of revenue each year. In reality, the revenues were 86% below what they were reported to be. Barry took over $20 million in loans from 15 banks and several individuals in furtherance of his fraud.

He was sentenced to 25 years in prison while still in his early twenties, and ultimately spent more than seven years in prison, all of it in maximum or medium security prisons. Minkow's sentence also included $26 million in restitution. While in prison, Minkow became a Christian and devoted his life to ministry.

Continue reading Financial Felons: Barry Minkow

Financial Felons: Barry Minkow originally appeared on BloggingStocks on Fri, 21 Nov 2008 10:17:00 EST. Please see our terms for use of feeds.

Barry Minkow, the ex-con mastermind of the Zzzz Best Carpet cleaning fraud, who reformed himself into a crusader against fraud, is back in the limelight. After receiving numerous accolades for helping federal agencies uncover more than $1 billion in frauds, he is out with his new set of three DVDs titled Frauds Gone Wild, which consists of Protecting Yourself from Investment Fraud, Protecting Yourself from Affinity Fraud, and Protecting Yourself from Elder Fraud. The production of the films was financed by a man who had tipped Barry off on a fraud in progress. While he did not end up getting his money back, he wanted to help other people from falling victim to fraud.

Several months ago, I received free review copies of the DVDs from Mr. Minkow's Fraud Discovery Institute. While they are entertaining and well put together, the $17.99 that Amazon is charging for each volume is far too expensive for them to be a good investment, in my opinion. Each DVD is about 30 minutes long, but much of the material is the same throughout. You will get the gist of protecting yourself from watching one of them. My advice: if you're interested in learning about fraud and how it works, just order Protecting Yourself from Affinity Fraud. It's the most psychologically interesting, and covers much of the material from the other two.

DVD review: Barry Minkow's Frauds Gone Wild originally appeared on BloggingStocks on Sat, 17 Mar 2007 18:10:00 EST. Please see our terms for use of feeds.

On Thursday, BloggingStocks writer Kevin Kelly wrote about former stock fraudster turned private investigator, Barry Minkow's scathing report on USANA Health Sciences, a multi-level marketing company. When the Wall Street Journal picked up Minkow's research, the stock tumbled 15% in one day. At 9:03 that night, USANA Health Sciences (NASDAQ: USNA) reported that it had filed a lawsuit against Barry Minkow and his Fraud Discovery Institute, accusing him of defamation. The company issued a statement that begins:

"USANA believes Mr. Minkow's statements are part of a coordinated public relations program financed by a paying client and from which Mr. Minkow will profit personally. According to reporting in the March 15, 2007 edition of The Wall Street Journal, Mr. Minkow , '...has bought 'put' options on USANA's shares in a bet the price will fall.' Mr. Minkow admits that he has been paid to conduct his 'investigation' against USANA. Further, he has engaged a public relations firm to propagate his false and misleading statements about USANA to the media."

Continue reading BloggingStocks Exclusive: Ex-Con Barry Minkow responds to USANA lawsuit

BloggingStocks Exclusive: Ex-Con Barry Minkow responds to USANA lawsuit originally appeared on BloggingStocks on Sat, 17 Mar 2007 09:47:00 EST. Please see our terms for use of feeds.