Three former registered representatives settled charges that they manipulated the stock of a microcap company in an attempt to obtain a Nasdaq listing.
In a recent Order, the SEC alleged that Richard P. Cedrone, Steven R. Ferris and George R. Thoreson (collectively, the "representatives") manipulated the stock of Abakan, Inc. ("Abakan") in order to meet certain Nasdaq listing requirements. The representatives allegedly engaged in a market manipulation scheme that involved placing trades in order to artificially inflate Abakan's stock price on each trading day. The representatives allegedly monitored the bid-and-ask activity of Abakan's stock and conducted various transactions, often on opposite sides of the market, in order to ensure that the stock closed above the $2 minimum Nasdaq listing requirement for the prescribed period.
The representatives were charged with violating Securities Act Sections 5 and 17(a), and Exchange Act Sections 9(a)(2) and 10(b), as well as Exchange Act Rule 10b-5. Mr. Cedrone also was charged with violating a penny stock bar and an SEC Order as the result of a previous and unrelated settlement with the SEC in which he was barred from participation in penny stock offerings.
As a result of the alleged misconduct, Mr. Cedrone agreed to pay over $155,000 and Mr. Thoreson agreed to pay $75,000. Determination of the penalties against Mr. Ferris will be "deferred until after the terms of his cooperation agreement in the case are completed."
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