The SEC filed a Complaint against Beaufort Securities Ltd. ("Beaufort"), a UK-based brokerage firm, and an investment manager, Panayiotis Kyriacou (collectively, the "defendants"), for allegedly manipulating the market of a microcap stock by wash trading shares of HD View 360 Inc. ("HD View"), a microcap issuer. The Complaint was filed in the U.S. District Court for the Eastern District of New York ("EDNY").
As alleged, in an undercover operation, an FBI agent approached Mr. Kyriacou with a "pump and dump" scheme to make HD View appear actively traded and then sell their shares after driving up the price. Mr. Kyriacou allegedly arranged a plan to manipulate the stock price through wash trading. The SEC stated that Mr. Kyriacou fraudulently doubled HD View's stock price by purchasing HD View stock through Beaufort while the agent promised to arrange for complicit brokerage firms to simultaneously sell shares from other associates' accounts.
The SEC charged the defendants for violating Exchange Act Section 10(b) and Rules 10b-5(a) and (c) by knowingly engaging in activities to defraud persons in connection with the purchase and sale of securities.
In a parallel case, the SEC filed a Complaint in EDNY against HD View CEO Dennis J. Mancion and WT Consulting Group, LLC ("WT Consulting") CEO William T. Hirshy (and related entities TJM Investments, Inc., DJK Investments 10 Inc., and WT Consulting). The SEC alleged that the defendants of the second Complaint sought to profit by manipulating the market for the stock of two microcap companies: HD View and West Coast Ventures Group Corp. According to the SEC, the defendants used their entities and brokers to cause a demand for stock through similar patterns of match trading and were charged for violating the Securities Act Section 17(a)(1) and Exchange Act Sections 9(a)(1), 9(a)(2), 10(b) and Rules 10b-5(a) and (c).
The SEC suspended trading in the securities of HD View. The SEC determined that HD View may have engaged in manipulative activity due to statements made in a February press release, which mentioned enhancing a subsidiary with blockchain technology, and in suspicious stock activity since January 31, 2018. The suspension is effective until March 15, 2018.
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