Wednesday, July 30, 2014

SEC Charges Florida-Based Transfer Agent and Owner with Defrauding Investors

The SEC announced it has charged a Florida-based transfer agent and its owner with defrauding investors by using aggressive boiler room tactics to peddle worthless securities with promises of high returns or discounted prices. 
Transfer agents are typically used by publicly-traded companies to keep track of the individuals and entities that own their stocks and bonds.  The SEC alleges that the individual, whose firm International Stock Transfer Inc. (IST) was a registered transfer agent, abused the transfer agent function by creating and issuing fake securities certificates to both U.S. and international investors.  While investors collectively sent in millions of dollars thinking they were purchasing high-yield investments and discounted stock, they ended up receiving counterfeit certificates that the individual and IST fooled them into thinking were legitimate. 
In a parallel action, the U.S. Attorney’s Office for the Eastern District of New York today announced criminal charges against the individual.
“[This man] brazenly misused his transfer agent authority to commit fraud by creating fake certificates and acting as if he was authorized by issuers to do so,” said Andrew M. Calamari, Director of the SEC’s New York Regional Office.  “His promise of high-yield investment returns and his use of attorneys to receive investor money were simply lures to take advantage of unsuspecting investors.”
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