Friday, December 16, 2011

SEC Charges "Shell Packagers" and Several Others in Penny Stock Scheme

The SEC alleges that Belmont Partners LLC and its President utilized fabricated and backdated documents to convince a transfer agent and an attorney writing an opinion letter to issue free-trading shares of Alternative Green Technologies Inc. (AGTI). The SEC also charged AGTI, its CEO, a business partner and stock promoters for their roles in the scheme that resulted in unknowing investors purchasing fraudulently issued AGTI shares without the protections afforded by the securities laws.

“Shell packagers who buy and sell public companies for use by fraudsters have no rightful place in our markets,” said David Rosenfeld, Associate Director of the SEC’s New York Regional Office. “These shell packagers not only sold the shell company, but created the false documents necessary to cause the transfer agent to issue shares that should never have been sold to the public.”

According to the SEC’s complaint, false documents were submitted to a transfer agent and an attorney, who relied on them to conclude that free-trading shares of AGTI could legitimately be issued. The fraud was aided by Belmont Partner and their CEO creating and sometimes backdating the false documentation, including a sham assignment of debt and a fabricated and backdated corporate resolution and convertible note. Then AGTI's CEO then used the illegally issued stock certificates to fund promotional campaigns promoting their stock. The stock promoters were charged with selling the unregistered securities.


SEC Charges "Shell Packagers" and Several Others in Penny Stock Scheme
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