A Florida investment adviser has been charged in New York in an $8 million securities fraud scheme that capitalized on enthusiasm for Facebook shares.
Craig L. Berkman was arrested Tuesday at his home in Odessa, Fla., and detained until a hearing Thursday.
He was charged with claiming to own Facebook shares before the company went public last year when he did not directly own shares. Prosecutors say he pocketed much of $8 million he received from over 50 investors.
The Securities and Exchange Commission announced separate civil charges.
Prosecutors say Berkman falsely claimed to investors in December 2010 that he owned shares of Menlo Park, Calif.-based Facebook Inc. The government said he operated a private company called Ventures Trust II LLC.
The 71-year-old businessman's lawyers haven't returned messages for comment.