The Investment Banking Risks Taken by Martin Lustgarten

Investment banking is one of the primary drivers of the United States and global economies. There are thousands of investment banks across the globe that assist governments, individuals and companies with raising financial capital or issuing securities. In many instances, investment banks are involved in mergers and acquisitions to offer ancillary services like equity securities, market making, derivative trading and fixed income instruments, currencies and commodities.

Investment Banking Lines of Business
There are two primary lines of business within investment banking: sell side and buy side. Sell side is comprised of trading securities for other securities or cash. The buy side encompasses advice to corporations, governments and individuals who purchase investment services such as mutual funds, private equity funds, hedge funds and unit trusts.
Investment banks are often also split into public and private functions with a wall separating the two business entities to prevent the crossing of information. The public areas manage stock analysis and public information. The private side manages private insider information that cannot be disclosed publicly. All investment banking advisors must be licensed broker-dealers and are subject to the Financial Industry Regulatory Authority (FINRA) and U.S. Securities and Exchange Commission (SEC) regulations.
Martin Lustgarten
Based out of Miami, Florida, Martin Lustgarten is a locally successful businessman who maintains dual-citizenship in Austria and Venezuela. Since 2007, Miami investigators had been keeping tabs on Lustgarten, slowly collecting evidence that he had been laundering multi-millions of dollars for drug traffickers and paramilitary groups in Colombia and Mexico. After eight years of tracking and gathering evidence, Lustgarten was arrested following a grand jury indictment. He was charged with conspiracy to commit money laundering, conspiracy to obstruct an official proceeding and obstruction of an official proceeding. This case exposed the drug money nexus between Venezuela and Miami that is rampant in South Florida.
However, nine months later, the case unraveled and prosecutors dismissed all charges against Martin Lustgarten. This turned out to be a striking setback for United States government efforts to reprimand those who profit from narcotics. Lustgarten operated companies in locations around the world, including Hong Kong, Singapore and Panama. These successful firms approved purchase-order financing and capital loans to Venezuelan firms involved in the international trade. The companies would exchange American currency on the black market for Venezuelan Bolivars at a much higher rate than normal. Through deals with these companies, Venezuelan importers would then have access to American currency to pay for consumer goods being imported into the country. Check out Marin Lustgarten’s Tumblr page for interesting photos and updates.