Defrocked NM Broker Rolls the Dice to Stay out of Jail

A New Mexico judge has approved an unusual plea deal in a securities fraud case allowing a former Albuquerque stock broker accused of fleecing clients in order to pay gambling debts to stay out of jail by rolling the dice – literally.

 

The Albuquerque Journal reported that District Judge Ross C. Sanchez agreed to hold off jailing Samuel McMaster Jr. to allow him to travel around the country, mostly for poker tournaments. The reason: to raise funds to pay $444,486.31 to 23 individuals or couples named as victims in the plea pact. The Journal said McMaster has been playing poker to make ends meet since he can no longer work in the securities industry.

Under the terms of the deal, McMaster, who listed his occupation on court papers as “professional gambler,” is supposed to start making his monthly $7,500 restitution payments November 1. If he skips two payments, the case reverts back to the court docket and he will have to appear for sentencing in Sanchez’s courtroom where he will face up to 12 years in jail.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

According to the newspaper, McMaster pleaded guilty to 26 felony charges of securities fraud, sale of an unregistered security, sale of a security by an unlicensed broker-dealer, fraud over $20,000, and fraud over $2,500 as part of the plea deal.

“We do have the unusual case here where we are agreeing to delay sentencing for a period of time to allow Mr. McMaster to set a track record as to whether or not he can pay back $400,000 in restitution,” prosecutor Phyllis H. Bowman told the Journal.

McMaster was originally charged in April 2009 with 177 counts of securities and fraud-related charges by the securities division of the state Regulation and Licensing Department and the Bernalillo County District Attorney’s Office, but some of the allegations were dropped as part of the plea. He faced 549 years in prison if convicted on all the original counts.

Details of the Allegations  

Bowman told the newspaper that most of McMaster’s victims were lured in by a "very well-liked, reputable insurance agent" who offered high returns on CDs and promissory notes through his company. 

A state Regulation and Licensing Department news release about the indictment included this description of the allegations:   

The indictment relates to the alleged activities of McMaster’s Albuquerque-based firm, Santa Fe Financial Group, Inc. from December 2000 to November 2005. McMaster sold insurance products and securities through his company, but eventually was barred from working in the securities industry for failure to respond to regulatory requests for information. In May 2005 he also lost his last insurance appointment.

However, McMaster continued to operate and allegedly solicited his clients to invest in unregistered securities described as “notes” or “CDs” issued by his company. The “notes” were due in six to twenty-four months with interest rates ranging from six to 10%. McMaster failed to disclose information that could have influenced an investor’s decisions and also is alleged to have misrepresented how the money was to be used.

Investors who requested their funds back were told that the notes had been “rolled over,” but never received payment. Many investors could not reach him by phone and he allegedly told others he was having trouble with the Internal Revenue Service.

The McMaster indictment is at http://www.rld.state.nm.us/PublicInfo/2009/McMaster%20Indictment.pdf.

Are You Seeing Red?

Guys looking to attract the attention of the opposite sex – or simply to appear more powerful - might want to consider a slight wardrobe change.

 

While a rose by any other name might well smell as sweet, turns out that merely wearing the color red or being bordered by the rosy hue makes a man more attractive and sexually desirable to women, according to a series of studies by researchers at the University of Rochester and other institutions.

Better yet (from the guy’s perspective, anyway) – women are apparently unaware of this arousing effect – which, sorry ladies, apparently only works one way.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

Red’s influence ultimately lies in its ability to make men appear more powerful, says lead author Andrew Elliot, professor of psychology at the University of Rochester. “We found that women view men in red as higher in status, more likely to make money and more likely to climb the social ladder. And it’s this high-status judgment that leads to the attraction,” Elliot said in a press release about the study.

The Study

To quantify the red effect, the paper analyzed responses from 288 female and 25 male undergraduates to photographs of men in seven different experiments. Participants were all self-identified as heterosexual or bisexual. In one color presentation, participants looked at a man’s photo framed by a border of either red or white and answered a series of questions, such as: “How attractive do you think this person is?”

Other experiments contrasted red with gray, green, or blue. Colors were precisely equated in lightness and intensity so that test results could not be attributed to differences other than hue, according to the report.

In several experiments, the shirt of the man in the photographs was digitally colored either red or another color. Participants rated the pictured man’s status and attractiveness, and reported on their willingness to date, kiss, and engage in other sexual activity with the person. They also rated the man’s general likability, kindess, and extraversion.

Interestingly enough, the researchers found that the red effect was limited to status and romance: red made the man seem more powerful, attractive, and sexually desirable, but did not make the man seem more likable, kind, or sociable – and this effect was found to be consistent across cultures: undergraduates in the United States, England, Germany, and China all found men more attractive when wearing or bordered by red. 

That said, the effect was limited to women. When males were asked to rate the attractiveness of a pictured male, color made no difference in their responses.  In earlier work, Elliot documented that men are more attracted to women in red. But the red effect depends on the context, according to the research . Elliot and others have also shown that seeing red in competitive situations, such as IQ tests or sporting events, leads to worse performance.

The paper was coauthored by Daniela Niesta Kayer, University of Rochester; Tobias Greitemeyer, University of Innsbruck; Stephanie Lichtenfeld, University of Munich; Richard H. Gramzow, University of Southampton; Markus A. Maier, University of Munich; and Huijun Liu, Tainjin Medical University.

Why Red?

But why would red send that signal rank? The study’s authors see both culture and biology at work, noting that in human societies across the globe, red traditionally has been part of the regalia of the rich and powerful. Ancient China, Japan and sub-Saharan Africa all used the vibrant tint to convey prosperity and elevated status, and Ancient Rome's most powerful citizens were literally called "the ones who wear red." Even today, the authors note, businessmen wear a red tie to indicate confidence, and celebrities and dignitaries are feted by "rolling out the red carpet."

Beyond these “learned” associations, the authors point to the biological roots of human behavior. In non-human primates, like mandrills and gelada baboons, red is an indicator of male dominance and is expressed most intensely in alpha males. Females of these species mate more often with alpha males, who in turn provide protection and resources, according to the report.

"When women see red it triggers something deep and probably biologically engrained," explains Elliot. "We say in our culture that men act like animals in the sexual realm. It looks like women may be acting like animals as well in the same sort of way."

The research was funded by the Alexander von Humboldt Foundation and an Excellence Guest Professorship at the University of Munich.

The study was published in the August 2 issue of the Journal of Experimental Psychology: General. 

«