The SEC charged a Florida-based penny stock company and its CEO with defrauding investors by issuing false and misleading press releases proclaiming large sales and fantastic revenue projections while the purported health food company actually was a failing enterprise.
The SEC alleges that Heathrow Natural Food & Beverage Inc. touted sales of natural health food products that the company had not even manufactured as well as non-existent distribution agreements with major retail chains. Meanwhile, its CEO was prompting the illegal, unregistered distribution of billions of shares of company stock to several people or entities, including himself. The CEO profited by more than $150,000 by selling 877 million of his shares into the market as the false press releases were stimulating public demand for Heathrow stock. The CEO is also charged with insider trading because he sold his shares while in possession of material nonpublic information about the falsehood of the press releases.
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