The SEC charged
a penny stock promoter in the San Diego area for fraudulently arranging the
purchase of $2.5 million worth of shares in a penny stock company in an attempt
to generate the false appearance of market interest and induce other investors
to purchase the stock.
The SEC alleges that the promoter artificially
increased the trading price and volume of iTrackr Systems stock when he
conspired with a purported businessman with access to a network of corrupt
brokers. What the promoter didn’t know was that the purported businessman was
actually an undercover FBI agent. During a test run of their arrangement, the
promoter paid a $3,000 kickback in exchange for the initial purchase of $14,000
worth of iTrackr shares.
In a parallel action, the U.S. Attorney’s
Office for the Southern District of California today filed criminal charges
against the promoter.
“[The promoter] tried to artificially inflate
the price and volume of iTrackr shares to the detriment of retail investors who
wouldn’t have known the real story behind the flurry of market activity,” said
Michele Wein Layne, Director of the SEC’s Los Angeles Office. “Working with
criminal authorities, we were able to stop [the promoter]’s misconduct before
he could seriously impact the markets and harm investors.”
The SEC also has issued an order to suspend
trading in iTrackr securities.
According to the SEC’s complaint filed in
federal court in San Diego, the promoter set out to give the markets a false
impression of supply and demand in iTrackr stock where none actually existed.
He coordinated the purchase of iTrackr shares so the stock price could remain
high enough for him to effectively promote it at a later date and artificially
inflate the price even higher. [The promoter] arranged for the dissemination of
promotional material that overstated the likelihood of iTrackr’s success and
future profits.
For more information, visit SEC Charges San Diego-Based Promoter in Penny Stock Scheme.
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The attorneys at Sallah Astarita & Cox include veteran securities
litigators and former SEC Enforcement Attoreys. We have decades of experience
in securities litigation matters, including the defense of enforcement actions.
We represent firms and brokers nationwide. For more information contact Mark Astarita at
212-509-6544 or by email
