Zimbabwe Stocks Lose Appeal as ZiG Liquidity Squeeze Deepens
The central bank's tight monetary policy stance after a 43% devaluation of the ZiG in September has 'arrested price movement' on the Zimbabwe Stock Exchange, according to IH Securities. The all-share index has slumped 21%, compared with a 160% jump before the ZiG, which debuted on April 8 was devalued.
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Business Wire
06-08-2025
- Business Wire
Turning Point Brands Announces Second Quarter 2025 Results
LOUISVILLE, Ky.--(BUSINESS WIRE)-- Turning Point Brands, Inc. ('TPB' or 'the Company') (NYSE: TPB), a manufacturer, marketer and distributor of branded consumer products, including alternative smoking accessories and consumables with active ingredients, today announced financial results for the second quarter ended June 30, 2025. Modern Oral Net Sales for Q2 2025 increased 651% (or nearly 8x) year-over-year to $30.1 million, and now accounts for 26% of total Net Sales Share Q2 2025 vs. Q2 2024 Total consolidated Net Sales increased 25.1% to $116.6 million Stoker's segment Net Sales increased 62.9% Zig-Zag segment Net Sales decreased 6.9% Gross Profit increased 32.2% to $66.6 million Net Income increased 11.3% to $14.5 million Adjusted EBITDA increased 14.8% to $30.5 million (see Schedule A for a reconciliation to net income) Adjusted Net Income increased 4.5% to $18.0 million (see Schedule B for a reconciliation to net income) Diluted EPS of $0.79 and Adjusted Diluted EPS of $0.98 compared to $0.68 and $0.89, respectively, in the same period one year ago (see Schedule B for a reconciliation to Diluted EPS) Graham Purdy, President and CEO, commented, 'Our consolidated second quarter results were better than expected. Modern Oral sales were $30.1 million, increasing by 35% versus prior quarter and up 651% against the prior year. Stoker's MST and looseleaf showed modest gains with Zig-Zag flat sequentially.' Stoker's Products Segment (60% of total net sales in the quarter) For the second quarter, Stoker's segment net sales increased 62.9% from the prior year to $69.6 million, driven by strong growth in Modern Oral sales, mid-single-digit growth in MST offset by low single-digit declines in looseleaf. For the second quarter, total Stoker's Products segment volume increased 48.3%, while price / product mix increased 14.5%. Stoker's segment gross profit increased 85.0% from the prior year, and 27.8% sequentially from Q1 2025 to $43.5 million. Gross margin increased 750 basis points from the prior year and 500 basis points sequentially to 62.5%. Zig-Zag Products Segment (40% of total net sales in the quarter) For the second quarter, Zig-Zag segment net sales decreased 6.9% to $47.0 million against prior year, but close to flat sequentially. Zig-Zag segment gross profit decreased 14.0% to $23.1 million. Gross margin decreased 410 basis points to 49.1% driven by product mix. Performance Measures in the Second Quarter Second quarter 2025 consolidated selling, general and administrative ('SG&A') expenses were $40.3 million compared to $29.2 million in the second quarter of 2024 primarily driven by white pouch-related SG&A that was not in the prior year period, as well as increased outbound freight and sales and marketing investments. Second quarter SG&A included the following notable items: $1.7 million of FDA PMTA-related expenses for Modern Oral products compared to $1.0 million in the prior year period; and $0.6 million of transaction-related costs compared to $0.1 million in the prior year period. $0.8 million of non-recurring freight costs compared to $0.0 million in the prior year period. $0.5 million of non-recurring legal costs in connection with litigation related to an insurance claim compared to $0.0 million in the prior year period. Total gross debt as of June 30, 2025 was $300.0 million. Net debt (total gross debt less unrestricted cash) as of June 30, 2025 was $190.1 million. The Company ended the quarter with total liquidity of $176.4 million, comprised of $109.9 million in cash and $66.5 million of availability under its asset backed revolving credit facility. 2025 Outlook The Company is increasing full-year 2025 projected Modern Oral sales to $100.0 – 110.0 million (from $80.0 – 95.0 million). The Company is increasing full-year 2025 Adjusted EBITDA guidance to $110.0 – 114.0 million (from $108.0 – 113.0 million). Earnings Conference Call As previously disclosed, a conference call with the investment community to review TPB's financial results has been scheduled for 9:30 a.m. Eastern on Wednesday, August 6, 2025. Investment community participants should dial in 10 minutes ahead of time using the toll-free number (800) 715-9871 (international participants should call (646) 307-1963) and follow the audio prompts after typing in the event ID: 6640134. A live listen-only webcast of the call will be available on the Events and Presentations section of the investor relations portion of the Company website ( A replay of the webcast will be available on the site two hours following the call. Non-GAAP Financial Measures In addition to financial measures prepared in accordance with generally accepted accounting principles in the United States (GAAP), this press release includes certain non-GAAP financial measures including EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS and Adjusted Operating Income (Loss). A reconciliation of these non-GAAP financial measures accompanies this release. About Turning Point Brands, Inc. Turning Point Brands (NYSE: TPB) is a manufacturer, marketer and distributor of branded consumer products including smoking accessories and consumables with active ingredients through its Zig-Zag®, Stoker's®, FRE®, and Alp Pouch® brands. TPB's products are available in more than 220,000 retail outlets in North America, and on sites such as For the latest news and information about TPB and its brands, please visit Forward-Looking Statements This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may generally be identified by the use of words such as "anticipate," "believe," "expect," "intend," "plan" and "will" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. As a result, these statements are not guarantees of future performance and actual events may differ materially from those expressed in or suggested by the forward-looking statements. Any forward-looking statement made by TPB in this press release, its reports filed with the Securities and Exchange Commission (the 'SEC') and other public statements made from time-to-time speak only as of the date made. New risks and uncertainties come up from time to time, and it is impossible for TPB to predict or identify all such events or how they may affect it. TPB has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws. Factors that could cause these differences include, but are not limited to, those included in the Company's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed by the Company with the SEC. These statements constitute the Company's cautionary statements under the Private Securities Litigation Reform Act of 1995. This press release contains TPB's preliminary determinations and current expectations, and such information is inherently uncertain. The preliminary estimates provided herein have been prepared by, and are the responsibility of, management and are subject to completion of TPB's customary quarter-end closing and review procedures and third-party review. As a result, TPB's reported information in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 may differ from this information, and any such differences may be material. In addition, the information furnished above does not include all of the information regarding TPB's financial condition and results of operations for the quarter ending June 30, 2025 that may be important to readers. As a result, readers are cautioned not to place undue reliance on the information furnished in this press release and should view this information in the context of TPB's full second quarter 2025 results when such results are disclosed by TPB in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 Financial Statements Follow on Subsequent Pages Three Months Ended June 30, 2025 2024 Net sales $ 116,634 $ 93,225 Cost of sales 50,011 42,827 Gross profit 66,623 50,398 Selling, general, and administrative expenses 40,296 29,200 Other operating income - (1,674 ) Operating income 26,327 22,872 Interest expense, net 5,140 3,042 Investment (gain) loss (17 ) 2,439 Income from continuing operations before income taxes 21,204 17,391 Income tax expense 4,244 4,430 Income from continuing operations 16,960 12,961 Loss from discontinued operations, net of tax - (41 ) Consolidated net income 16,960 12,920 Net income (loss) attributable to non-controlling interest 2,480 (87 ) Net income attributable to Turning Point Brands, Inc. $ 14,480 $ 13,007 Basic income per common share: Continuing operations $ 0.81 $ 0.74 Discontinued operations - - Net income attributable to Turning Point Brands, Inc. $ 0.81 $ 0.74 Diluted income per common share: Continuing operations $ 0.79 $ 0.68 Discontinued operations - - Net income attributable to Turning Point Brands, Inc. $ 0.79 $ 0.68 Weighted average common shares outstanding: Basic 17,920,567 17,656,732 Diluted 18,321,913 20,156,854 Expand Turning Point Brands, Inc. Consolidated Balance Sheets (dollars in thousands except share data) (unaudited) June 30, December 31, ASSETS 2025 2024 Current assets: Cash $ 109,925 $ 46,158 Accounts receivable, net of allowances of $157 in 2025 and $66 in 2024 30,056 9,624 Inventories, net 105,009 96,253 Current assets held for sale - 11,470 Other current assets 40,227 34,700 Total current assets 285,217 198,205 Property, plant, and equipment, net 30,982 26,337 Deferred tax assets, net - 995 Right of use assets 10,577 11,610 Deferred financing costs, net 1,501 1,823 Goodwill 136,104 135,932 Other intangible assets, net 64,650 65,254 Master Settlement Agreement (MSA) escrow deposits 29,574 28,676 Noncurrent assets held for sale - 3,859 Other assets 37,183 20,662 Total assets $ 595,788 $ 493,353 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 26,169 $ 11,675 Accrued liabilities 41,340 31,096 Current liabilities held for sale - 2,049 Total current liabilities 67,509 44,820 Deferred tax liabilities, net 1,974 - Notes payable and long-term debt 293,138 248,604 Lease liabilities 8,344 9,549 Total liabilities $ 370,965 $ 302,973 Commitments and contingencies Stockholders' equity: Preferred stock, $0.01 par value; authorized shares 40,000,000; issued and outstanding shares -0- - - Common stock, voting, $0.01 par value; authorized shares, 190,000,000; 20,492,267 issued shares and 18,020,862 outstanding shares at June 30, 2025, and 20,200,886 issued shares and 17,729,481 outstanding shares at December 31, 2024 205 202 Common stock, nonvoting, $0.01 par value; authorized shares, 10,000,000; issued and outstanding shares -0- - - Additional paid-in capital 130,245 126,662 Cost of repurchased common stock (2,471,405 shares at June 30, 2025 and December 31, 2024) (83,144 ) (83,144 ) Accumulated other comprehensive loss (2,010 ) (2,903 ) Accumulated earnings 173,280 147,164 Non-controlling interest 6,247 2,399 Total stockholders' equity 224,823 190,380 Total liabilities and stockholders' equity $ 595,788 $ 493,353 Expand Turning Point Brands, Inc. Consolidated Statements of Cash Flows (dollars in thousands) (unaudited) Six Months Ended June 30, 2025 2024 Cash flows from operating activities: Consolidated net income $ 32,751 $ 25,099 Loss from discontinued operations, net of tax - 43 Adjustments to reconcile net income to net cash provided by operating activities: Loss on extinguishment of debt 1,235 - Loss on sale of property, plant, and equipment 45 7 Loss on investments 194 2,722 Depreciation and other amortization expense 2,893 1,743 Amortization of other intangible assets 612 610 Amortization of deferred financing costs 872 1,393 Deferred income tax expense 2,716 363 Stock compensation expense 3,292 3,951 Noncash lease income (728 ) (85 ) Loss on MSA investments - 6 Changes in operating assets and liabilities: Accounts receivable (20,504 ) (2,563 ) Inventories (8,604 ) (5,145 ) Other current assets (5,486 ) 3,088 Other assets (4,087 ) (279 ) Accounts payable 14,187 3,154 Accrued liabilities and other 9,842 (3,033 ) Operating cash flows from continuing operations 29,230 31,074 Operating cash flows from discontinued operations - 5,003 Net cash provided by operating activities $ 29,230 $ 36,077 Cash flows from investing activities: Capital expenditures $ (6,176 ) $ (2,858 ) Proceeds on the sale of property, plant and equipment - 2 Payment for equity investments (2,783 ) - Purchases of investments (4,079 ) (7,934 ) Proceeds from sale of investments 4,460 3,314 Purchases of non-marketable equity investments - (500 ) MSA escrow deposits, net (48 ) 4 Investing cash flows from continuing operations (8,626 ) (7,972 ) Investing cash flows from discontinued operations - - Net cash used in investing activities $ (8,626 ) $ (7,972 ) Cash flows from financing activities: Redemption of 2026 Notes $ (250,000 ) $ - Proceeds from 2032 Notes 300,000 - Payment of dividends (2,731 ) (2,407 ) Payment of financing costs (7,251 ) (133 ) Exercise of options 4,921 900 Redemption of options (33 ) (4 ) Redemption of restricted stock units (1,970 ) (840 ) Redemption of performance based restricted stock units (2,624 ) (1,212 ) Common stock repurchased - (3,051 ) Financing cash flows from continuing operations 40,312 (6,747 ) Financing cash flows from discontinued operations - - Net cash provided by (used in) financing activities $ 40,312 $ (6,747 ) Net increase in cash $ 60,916 $ 21,358 Effect of foreign currency translation on cash $ 20 $ (76 ) Cash, beginning of period: Unrestricted $ 48,941 $ 117,886 Restricted 1,961 4,929 Total cash at beginning of period $ 50,902 $ 122,815 Cash, end of period: Unrestricted $ 109,925 $ 142,159 Restricted 1,913 1,938 Total cash at end of period $ 111,838 $ 144,097 Expand Non-GAAP Financial Measures To supplement our financial information presented in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, we use non-U.S. GAAP financial measures, including EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted Operating Income . We believe Adjusted EBITDA provides useful information to management and investors regarding certain financial and business trends relating to our financial condition and results of operations. Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted Operating Income are used by management to compare our performance to that of prior periods for trend analyses and planning purposes and are presented to our board of directors. We believe that EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted Operating Income are appropriate measures of operating performance because they eliminate the impact of expenses that do not relate to business performance. We define 'EBITDA' as net income before interest expense, gain (loss) on extinguishment of debt, income tax expense, depreciation, amortization. We define 'Adjusted EBITDA' as net income before interest expense, gain (loss) on extinguishment of debt, income tax expense, depreciation, amortization, other non-cash items and other items that we do not consider ordinary course in our evaluation of ongoing operating performance. We define 'Adjusted Net Income' as net income excluding items that we do not consider ordinary course in our evaluation of ongoing operating performance. We define 'Adjusted Diluted EPS' as diluted earnings per share excluding items that we do not consider ordinary course in our evaluation of ongoing operating performance. We define 'Adjusted Operating Income' as operating income excluding other non-cash items and other items that we do not consider ordinary course in our evaluation of ongoing operating performance. Non-U.S. GAAP measures should not be considered a substitute for, or superior to, financial measures calculated in accordance with U.S. GAAP. EBITDA, Adjusted Net Income, Adjusted EBITDA, Adjusted Diluted EPS, and Adjusted Operating Income exclude significant expenses that are required by U.S. GAAP to be recorded in our financial statements and is subject to inherent limitations. In addition, other companies in our industry may calculate this non-U.S. GAAP measure differently than we do or may not calculate it at all, limiting its usefulness as a comparative measure. In accordance with SEC rules, we have provided, in the supplemental information attached, a reconciliation of the non-GAAP measures to the next directly comparable GAAP measures. Totals may not foot due to rounding (a) Represents costs associated with corporate restructuring, including severance and early retirement. (b) Represents cost associated with scoping and mobilization of new ERP and CRM systems and cost of duplicative ERP licenses. (c) Represents non-cash stock options, restricted stock, PRSUs, etc. (d) Represents the fees incurred for transaction expenses. (e) Represents elevated non-recurring outbound freight costs due to ERP transition (f) Represents legal expenses incurred in connection with litigation related to an insurance claim. (g) Represents costs associated with applications related to FDA premarket tobacco product application ('PMTA'). The PMTA regime requires the Company to submit an application to the FDA to receive marketing authorization to continue to sell certain of its product lines with continued sales permitted during the pendency of the applications. The application is a onetime resource-intensive process for each covered product line; however, due to the nature of the implementation process for those product lines already in the market, applications can take multiple years to complete rather than the typical one-time submission. The Company currently has only two product lines currently subject to the PMTA process, having utilized other regulatory pathway options available for our other product lines. The Company does not expect to submit additional PMTA applications for any new product lines after the submission for the remaining two are complete. (h) Represents a mark-to-market gain attributable to foreign exchange fluctuation. (i) Represents impairment of investment assets. (j) Represents gain on investments. Expand Schedule B Turning Point Brands Reconciliation of GAAP Net Income to Adjusted Net Income and Diluted EPS to Adjusted Diluted EPS (dollars in thousands except share data) (unaudited) Three Months Ended Three Months Ended June 30, 2025 June 30, 2024 Income from continuing operations before income taxes Income tax expense (m) Net income attributable to non-controlling interest Net Income Diluted EPS Income from continuing operations before income taxes Income tax expense (m) Loss from discontinued operations, net of tax (n) Net income attributable to non-controlling interest Net Income Diluted EPS GAAP Net Income and Diluted EPS $ 21,204 $ 4,244 $ 2,480 $ 14,480 $ 0.79 $ 17,391 $ 4,430 $ 41 $ (87 ) $ 13,007 $ 0.68 Loss on discontinued operations (a) - - - - - - - (41 ) - 41 0.00 Corporate restructuring (b) - - - - - 283 72 - - 211 0.01 ERP/CRM (c) - - - - - 489 125 - - 364 0.02 Stock options, restricted stock, and incentives expense (d) 1,628 326 - 1,302 0.07 1,889 481 - - 1,408 0.07 Transactional expenses and strategic initiatives (e) 569 114 - 455 0.02 97 25 - - 72 0.00 Non - recurring freight (f) 837 168 - 669 0.04 - - - - - - Non - recurring legal (g) 504 101 - 403 0.02 - - - - - - FDA PMTA (h) 1,651 330 - 1,321 0.07 997 254 - - 743 0.04 Mark-to-market gain on Canadian inter-company note (i) (665 ) (133 ) - (532 ) (0.03 ) - - - - - - Non-cash asset impairment (j) 908 182 - 726 0.04 2,722 693 - - 2,029 0.10 Gain on investment (k) (714 ) (143 ) - (571 ) (0.03 ) - - - - - - Federal excise tax refund (l) - - - - - (1,674 ) (426 ) - - (1,248 ) (0.06 ) Tax benefit (m) - 265 - (265 ) (0.01 ) - (578 ) - - 578 0.03 Expand (a) Represents loss on discontinued operations. (b) Represents costs associated with corporate restructuring, including severance and early retirement. (c) Represents cost associated with scoping and mobilization of new ERP and CRM systems and cost of duplicative ERP licenses. (d) Represents non-cash stock options, restricted stock, PRSUs, etc. (e) Represents the fees incurred for transaction expenses. (f) Represents elevated non-recurring outbound freight costs due to ERP transition (g) Represents legal expenses incurred in connection with litigation related to an insurance claim. (h) Represents costs associated with applications related to FDA premarket tobacco product application ("PMTA"). The PMTA regime requires the Company to submit an application to the FDA to receive marketing authorization to continue to sell certain of its product lines with continued sales permitted during the pendency of the applications. The application is a onetime resource-intensive process for each covered product line; however, due to the nature of the implementation process for those product lines already in the market, applications can take multiple years to complete rather than the typical one-time submission. The Company currently has only two product lines currently subject to the PMTA process, having utilized other regulatory pathway options available for our other product lines. The Company does not expect to submit additional PMTA applications for any new product lines after the submission for the remaining two are complete. (i) Represents adjustment from quarterly tax rate to quarterly projected tax rate of 21% in 2025 and 23% in 2024. (j) Represents impairment of investment assets. (k) Represents gain on investments. (l) Represents a federal excise tax refund included in other operating income. (m) Income tax expense calculated using the effective tax rate for the quarter of 20.0% in 2025 and 25.5% in 2024. Expand Schedule C Turning Point Brands, Inc. Reconciliation of GAAP Operating Income to Adjusted Operating Income (dollars in thousands) (unaudited) Consolidated Zig-Zag Products Stoker's Products 2nd Quarter 2nd Quarter 2nd Quarter 2nd Quarter 2nd Quarter 2nd Quarter 2025 2024 2025 2024 2025 2024 Net sales $ 116,634 $ 93,225 $ 47,018 $ 50,482 $ 69,616 $ 42,743 Gross profit $ 66,623 $ 50,398 $ 23,099 $ 26,873 $ 43,524 $ 23,525 Operating income $ 26,327 $ 22,872 $ 14,741 $ 18,260 $ 30,079 $ 17,862 Adjustments: Corporate restructuring - 283 - - - - ERP/CRM - 489 - - - - Transactional expenses and strategic initiatives 569 97 - - - - Non - recurring freight 837 - 92 - 745 - Non - recurring legal 504 - - - - - FDA PMTA 1,651 997 - - - - Mark-to-market gain on Canadian inter-company note (665 ) - - - - - Federal excise tax refund - (1,674 ) - (1,674 ) - - Expand
Business Insider
26-07-2025
- Business Insider
Foreign investor interest in Zimbabwe stocks climbs to multi-year highs
The growth reflects renewed investor interest amid improving economic fundamentals and the relative stability of the Zimbabwe's new gold-backed currency. Foreign participation in Zimbabwe's stock market increased significantly in Q2 2025, reaching 26.53% of total trades. Trades in value terms surged 153.94% to ZiG 743.6 million ($27.7 million) due to investor confidence. Introduction of Zimbabwe's gold-backed currency, ZiG, supported economic stability and trade improvement. Foreign participation in Zimbabwe's stock market climbed sharply in the second quarter of 2025, reflecting renewed investor interest amid improving economic fundamentals and the relative stability of the country's new gold-backed currency. According to the Zimbabwe Stock Exchange (ZSE)'s latest quarterly newsletter, foreign investor activity rose to 26.53% of total trades in Q2, up from 15.39% in the previous quarter. In value terms, foreign trades jumped 153.94% to ZiG 743.6 million ($27.7 million), compared to ZiG 292.8 million in Q1. While these figures remain below the over 40% participation seen in the early 2010s, they mark a notable rebound following years of capital flight driven by policy unpredictability, runaway inflation, and currency instability, according to Reuters. Gold production boosts confidence The renewed interest follows the April launch of the Zimbabwe Gold (ZiG), a new currency backed by gold reserves and other foreign assets, which has so far held its value. The ZiG recorded its biggest single-day gain against the U.S. dollar this year, buoyed by a sharp increase in gold production and stronger foreign currency reserves. The boost comes as gold production rose nearly 46% in the first half of the year to 20,104 kilograms, according to Fidelity Refineries, the country's sole gold refinery. June alone saw a 63% year-on-year surge in output. Authorities now hope the gold-backed ZiG will eventually take over from the US dollar, which has served as a parallel currency in the country since 2009. The International Monetary Fund (IMF) also expressed support for the ZiG, stating that it hopes to see the currency evolve into Zimbabwe's sole legal tender under a potential staff-monitored program. However, the Fund continues to urge authorities to maintain strict fiscal and monetary discipline. Total market turnover on the ZSE increased 53.14% in Q2 to ZiG 1.49 billion, with the top five listed companies accounting for over 86% of equity turnover and 81% of total turnover. Despite the increase in trading activity, the total market value dipped 3.08% to ZiG 62.64 billion, and the ZSE All Share Index fell 3.91% to close the quarter at 197.23 points. Meanwhile, on the Victoria Falls Stock Exchange (VFEX), a U.S. dollar-denominated bourse designed to attract offshore capital, turnover reached $15 million during the quarter. However, market capitalisation edged down to $1.25 billion from $1.29 billion in Q1. Average foreign participation on the VFEX stood at 18.73%.
12-07-2025
British man extradited to US to face federal charges in alleged $99 million wine scam
NEW YORK -- A British man has been brought to the U.S. to face charges in connection with an alleged $99 million Ponzi-like fraud involving expensive wines. James Wellesley, 58, pleaded not guilty during his arraignment Friday in Brooklyn federal court following his extradition from the United Kingdom, where he was arrested in 2022. He was ordered detained by a judge pending trial on wire fraud and money laundering charges. A lawyer for Wellesley didn't immediately respond to an email seeking comment. His co-defendant, Stephen Burton, was extradited from Morocco in 2023 after using a bogus Zimbabwean passport to enter that country. Burton, a 60-year-old British national, has also been detained and pleaded not guilty to similar charges in the same Brooklyn court. Prosecutors say the two men ran a company called Bordeaux Cellars that brokered loans between investors and wealthy wine collectors that were secured by their wine collections. From 2017 to 2019, they solicited $99 million in investments from residents of New York and other areas, promising their clients that they would profit from interest on the loans. But the wealthy wine collectors did not exist, no loans were made, and Bordeaux Cellars did not have custody of the wine securing the loans, prosecutors say. Instead, Burton and Wellesley used loan money provided by investors for themselves and to make fraudulent interest payments to other investors, prosecutors alleged.
