The Securities & Exchange Commission announced charges against 16 defendants located in the Bahamas, British Virgin Islands, Bulgaria, Canada, the Cayman Islands, Monaco, Spain, Turkey and the United Kingdom for their participation in a massive multi-year fraudulent penny stock scheme generating over $194 million in illegal proceeds. In addition parallel, criminal actions have been filed in New York Southern District Court. See a map of the scheme locations and wrongdoers https://www.sec.gov/files/2022_enf_penny-stock-scheme-map_508.pdf . The SEC filed Complaints in the U.S. District Court for the Southern District of New York charging the defendants with violating antifraud and registration provisions of the federal securities laws. They describe the scheme in which the defendants’ accumulated majority shares in penny stock companies using offshore nominee companies of using encrypted text and phone applications to evade detection. They then arranged to sell and buy the penny stocks after secretly funding promotional campaigns to boost the stock values in the U.S. and elsewhere. Those campaigns, it is alleged, spiked the value by increasing the demand for the stocks allowing the defendants to yield significant money as they could sell for a much higher price than the purchased price. The Court has issued Orders freezing the assets of the defendants and ordering repatriation of those assets. Complaint one https://www.sec.gov/files/litigation/complaints/comp-pr2022-61-shah.pdf It is unclear from the Complaint or the SEC’s release how the agency found out about the scheme.
JEFFREY NEWMAN, A FORMER PROSECUTOR IS A WHISTLEBLOWER LAWYER AND PARTNER IN THE FIRM Jeff Newman Law AND REPRESENTS WHISTLEBLOWERS IN THE SEC WHISTLEBLOWER PROGRAM AS WELL AS SIGNIFICANT FALSE CLAIMS ACT CASES. HE CAN BE REACHED AT firstname.lastname@example.org OR AT 617-823-3217