The SEC charged individuals and companies in two fraudulent microcap schemes (see here and here).
In the first scheme, the SEC charged six individuals and their associated companies for an international microcap fraud scheme that generated approximately $35 million in illicit sales. The SEC alleged that the individuals organized public company control persons to sell microchip stocks to U.S. retail investors. Since July 2015, the individuals allegedly helped various shareholders coordinate dumps of large quantities of microcap stock to avoid securities registration and disclosure requirements. These individuals were then paid a percentage of the net trading profits.
One of the six individuals was subject to additional SEC and DOJ charges for (i) aiding in the illicit sale of unregistered shares of EMS Find Inc. while artificially inflating the microcap stock's price and (ii) engaging in another manipulative trading scheme to artificially maintain and support the price of EMS Find's shares.
The SEC is seeking (i) permanent injunctions, (ii) disgorgement and civil penalties and (iii) penny stock bars.
In the second fraudulent microcap scheme, the SEC and DOJ charged a Danish citizen / Monaco resident for creating and almost completing a scheme to secretly run a microcap shell company to "pump and dump" its shares.
The SEC is seeking (i) a permanent injunction, (ii) disgorgement and civil penalties, and (iii) a penny stock bar to prevent further fraudulent activity.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.