Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announced that on June 30, 2011, five defendants were charged in connection with violation of the securities laws. Specifically, the cases charge “microcap” stock market insiders and promoters. The term “microcap stock” refers to companies with low or “micro” capitalizations, meaning the total value of the company’s stock. Microcaps typically have limited assets and its stocks tend to be low priced and trade in low volumes. To date, the Securities and Investment Fraud Initiative has yielded 16 convictions related to microcap stock fraud.
According to the informations, agents from the Federal Bureau of Investigation have been actively investigating the manipulation of thinly traded companies with securities quoted in the over-the-counter market commonly referred to as the “Pink Sheets.” As a result of the FBI’s efforts, public company officers, consultants, and a marketer/promoter have been charged with conspiracy to commit securities fraud.
Donald W. Klein, 40, of Frisco, TX, was charged with one count of conspiracy to commit securities fraud in connection with a scheme to defraud the investing public by engaging in deceptive and manipulative trading practices in connection with KCM Holdings, Inc. Klein was the president and chief executive officer of KCM Holdings, Inc. Klein is charged with engaging in a “pay-to-play” scheme to cause a stock broker to purchase KCM Holdings, Inc. stock in return for a kickback payment. Klein faces up to five years in prison, three years of supervised release, and substantial monetary fines.
Douglas Newton, 66, of Rancho Mirage, CA, was charged with one count of conspiracy to commit securities fraud in connection with a scheme to defraud the investing public by engaging in deceptive and manipulative trading practices in connection with Real American Brands, Inc. stock. Newton was the President of Real American Brands, Inc. Newton is charged with engaging in a “pay-to-play” scheme to cause a pension fund fiduciary to purchase Real American Brands, Inc. stock in return for a kickback payment. Newton faces up to five years in prison, three years of supervised release, and substantial monetary fines.
Charles Fuentes, 66, of Dana Point, CA, and Thomas Schroepfer, 54, of Las Vegas, NV, were charged with one count of conspiracy to commit securities fraud in connection with a scheme to defraud the investing public by engaging in deceptive and manipulative trading practices in connection with Smoke Free Innotec, Inc. stock. Fuentes was a consultant for Smoke Free Innotec, Inc. Schroepfer was the president of the company. Fuentes and Schroepfer are charged with engaging in a “pay-to-play” scheme to cause a pension fund fiduciary to purchase Smoke Free Innotec, Inc. stock in return for a kickback payment. Fuentes and Schroepfer each face up to 5 years in prison, three years of supervised release and substantial monetary fines.
Brian Gibson, 63, of Coconut Creek, FL, was charged with one count of conspiracy to commit securities fraud in connection with a scheme to defraud the investing public by engaging in deceptive and manipulative trading practices in connection with Xtreme Motorsports International, Inc. stock. Gibson was a marketing consultant for Xtreme Motorsports International, Inc. Gibson conspired with others to create an internet promotion website which encouraged investor interest in Xtreme Motorsports International, Inc. The website contained false and fraudulent statements, including false testimonials. Gibson faces up to five years in prison, three years of supervised release and substantial monetary fines.
Charges filed in this case resulted from the Southern District of Florida’s ongoing Securities and Investment Fraud Initiative. The Securities and Investment Fraud Initiative is a coordinated, multi-agency initiative targeting criminals operating a broad grouping of stock and commodities frauds in the Southern District of Florida.
U.S. Attorney Wifredo A. Ferrer stated, “This case demonstrates the continuing risks associated with thinly traded microcap companies. The defendants charged today abused their knowledge of the capital markets hoping to misappropriate money held in pension fund and brokerage accounts to enrich themselves and their co-conspirators.”
Also today, the Securities and Exchange Commission announced it had filed separate civil cases against the same five defendants for engaging in fraudulent schemes involving micro-cap stocks.
Tuesday, July 5, 2011
Southern District of Florida’s Securities and Investment Fraud Initiative Nets More Penny Stock Fraudsters
************************************************************************
Report Securities Fraud by Calling 1-888-482-6825 or by visiting
www.reportsecuritiesfraud.net
Subscribe to:
Post Comments (Atom)
1 comment:
Aspiring Securities and Investment Representatives are required to get securities license before they can get hired and perform their jobs. The good news is that most of these licenses are offered now through online providers of courses for example like Series 6 licensing exams, preparatory courses and other Series 6 study materials. This can definitely help people get into the high paying industry as most companies are looking for applicants with such license.
Post a Comment