Penny Stock Fraud

Stock and Bond Investment Publication Fraud and Misrepresentation Federal and State Litigation Attorney

Published on: March 7, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Colin McCabe (D/B/A Elite Stock Report, The Stock Profiteer, and Resource Stock Advisor), Civil Action No. 2:13-cv-00161

Recently, the Securities and Exchange Commission filed a civil action in the United States District Court for the District of Utah charging Canadian stock promoter Colin McCabe with disseminating false and misleading information to investors when recommending penny stocks to them.

In its complaint, the Commission alleges that, from at least early 2008 through 2011, McCabe, among other things: made false and misleading claims about how he selected recommended stocks; failed to disclose to his newsletter subscribers that he was being paid substantial sums to recommend some of the same stocks in his other publications; and made false and misleading statements about the assets of one of the issuers he recommended.

Falcon Ridge Development, Inc. and Fred M. Montano – Florida Stock Manipulation Litigation Attorney

Published on: March 5, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Falcon Ridge Development, Inc., et al., Civil Action No. 13-cv-1101 (E.D. Pa.)

SEC CHARGES FALCON RIDGE DEVELOPMENT, INC. AND ITS PRESIDENT AND CEO FOR MARKET MANIPULATION SCHEME

The Securities and Exchange Commission recently announced that it charged Falcon Ridge Development, Inc. (“Falcon Ridge”) and its President and CEO, Fred M. Montano, of Albuquerque, New Mexico, with engaging in a fraudulent scheme to manipulate the market for Falcon Ridge’s common stock. Falcon Ridge is a New Mexico real estate company, headquartered in Albuquerque. The United States Attorney for the Eastern District of Pennsylvania separately announced criminal charges involving the same conduct.

Adam S. Rosengard – Florida Penny Stock Manipulation Litigation and Arbitration Attorney

Published on: March 1, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Dynkowski, et al., Civil Action No. 1:09-361 (D. Del.)

Defendant Adam S. Rosengard Settles SEC Charges in Penny Stock Manipulation Case

The Securities and Exchange Commission recently announced that Chief Judge Gregory M. Sleet of the United States District Court for the District of Delaware entered a final judgment against Defendant Adam S. Rosengard on February 25, 2013 in SEC v. Dynkowski, et al., Civil Action No. 1:09-361, a stock manipulation case the SEC filed on May 20, 2009. The SEC’s complaint alleges that Defendant Pawel P. Dynkowski and others engaged in market manipulation schemes involving at least four separate stocks. The complaint alleges that Rosengard violated Section 5 of the Securities Act of 1933 by acting as a nominee account holder in one of the schemes.

Cameron H. Linton, Karen S. Beach, Capital Edge Enterprises, LLC., Protege Enterprises, LLC., Christel S. Succi – South Florida Penny Stock Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney

Published on: January 18, 2013 | By Russell L. Forkey, P.A.

United States District Court Enters Final Judgments in Penny Stock Distribution Scheme Charged by the Commission

The Commission announced the entry of final judgments against each of the five defendants in SEC v. Christel S. Scucci, et al., Case No. 6:12-cv-646 (M.D. Fla.). The Commission’s complaint, filed on April 30, 2012, charged the defendants with a scheme to unlawfully acquire and sell shares of penny stock that were never registered for sale to the public, in violation of Section 5 of the Securities Act of 1933 (“Securities Act”).

On September 14, 2012, the United States District Court for the Middle District of Florida entered a final judgment by consent as to defendant Cameron H. Linton Esq. (“Linton”): (1) permanently enjoining him from violating Section 5 of the Securities Act, (2) permanently enjoining him from providing professional legal services to any person in connection with the offer or sale of securities pursuant to, or claiming, an exemption under Securities Act Rule 144, or any other exemption from the registration provisions of the Securities Act, including, without limitation, participating in the preparation of any opinion letter relating to such offerings, (3) permanently barring him from participating in an offering of penny stock, and (4) ordering him to pay $13,750, including disgorgement of $6,250, and a civil penalty of $7,500. Linton consented to the entry of the final judgment without admitting or denying the allegations of the complaint.

Michael E. Metter and Steven Y. Moskowitz – Florida Penny Stock and Fraudulent Sale of Unregistered Stock Litigation and Arbitration Attorney

Published on: January 10, 2013 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Spongetech Delivery Systems, Inc., RM Enterprises International, Inc., Steven Y. Moskowitz, Michael E. Metter, George Speranza, Joel Pensley and Jack Halperin, Civil Action No. 10-2031 (E.D.N.Y.) (filed May 5, 2010)

SEC OBTAINS JUDGEMENTS AGAINST FORMER SPONGETECH EXECUTIVES MICHAEL E. METTER AND STEVEN Y. MOSKOWITZ

The Securities and Exchange Commission recently announced that on December 18, 2012 and June 12, 2012, the Honorable Judge Dora L. Irizarry, United States District Judge for the Eastern District of New York, entered Judgments against, respectively, Michael E. Metter (“Metter”), the former Chief Executive Office of Spongetech Delivery Systems, Inc. (“Spongetech”), and Steven Y. Moskowitz (“Moskowitz”), Spongetech’s former Chief Financial Officer. The judgments permanently enjoin Metter and Moskowitz from violating antifraud and securities registration provisions of the federal securities laws, as well as reporting, recordkeeping, and internal controls provisions. The Judgments also bar Metter and Moskowitz from serving as an officer or director of a public company, bar them from engaging in any offering of penny stock, and order them to pay penalties and disgorgement in amounts to be determined by the court, upon motion by the Commission. On September 20, 2012, the Commission instituted a settled administrative proceeding suspending Moskowitz from appearing or practicing before the Commission as an accountant.

Kamal Abdallah and Eric Todd Seiden – South Florida Low Priced Stock (Penny Stock) Fraud and Breach of Fiduciary Duty FINRA Arbitration and State (Broward and Palm Beach County) and Federal Litigation Attorney

Published on: December 27, 2012 | By Russell L. Forkey, P.A.

SECURITIES AND EXCHANGE COMMISSION v. ERIC TODD SEIDEN AND KAMAL ABDALLAH, Civil Action No. CV 09-3116 (KAM) (EDNY)

COURT ENTERS FINAL JUDGMENTS BY CONSENT AGAINST SEC DEFENDANTS ERIC TODD SEIDEN AND KAMAL ABDALLAH

The Securities and Exchange Commission recently announced that on March 30, 2012, the Honorable Kiyo A. Matsumoto, United States District Court Judge for the Eastern District of New York, entered a final judgment by consent against Defendant Kamal Abdallah. The final judgment permanently enjoins Abdallah from future violations of Sections 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder, prohibits Abdallah from acting as an officer or director of a public company, and bars him from participating in an offering of penny stock. The final judgment also orders Abdallah liable for disgorgement and prejudgment interest totaling $214,963.02, deemed satisfied by the restitution order entered against Abdallah in the parallel criminal action, United States v. Abdallah, 09-cr-717 (JFB) (E.D.N.Y.).

Danny Garber, Michael Manis, Kenneth Yellin and Jordan Feinstein – Florida Penny Stock Fraud and Misrepresentation FINRA Arbitration and State and Federal Litigation Attorney

Published on: December 27, 2012 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Danny Garber, Michael Manis, Kenneth Yellin, Jordan Feinstein, Aluma Holdings LLC, Azure Trading LLC, Coastal Group Holdings, Inc., Greyhawk Equities LLC, Leonidas Group Holdings LLC, The Leonidas Group LLC, Nismic Sales Corp., The OGP Group, Perlinda Enterprises LLC, Rio Sterling Holding LLC, Slow Train Holding LLC, and Spartan Group Holdings LLC, Civil Action No. 12 Civ. 9339 (SAS) (S.D.N.Y.)

SEC CHARGES FOUR PENNY STOCK PURCHASERS WITH FRAUD

The Securities and Exchange Commission recently charged four securities industry professionals with conducting a fraudulent penny stock scheme in which they illegally acquired over a billion unregistered shares in microcap companies at deep discounts and then dumped them on the market while claiming bogus exemptions from the registration provisions of the federal securities laws.

Spencer Pharmaceutical, Inc., Jean-Francois Amyot, Maximilien Arella, Ian Morrice, IBA Media Inc. and Hilbroy Advisory, Inc. – Florida Penny Stock Fraud and Misrepresentation Federal and State Court Litigation Attorney

Published on: December 18, 2012 | By Russell L. Forkey, P.A.

Securities and Exchange Commission v. Spencer Pharmaceutical Inc., Jean-François Amyot, Maximilien Arella, Ian Morrice, IAB Media Inc., and Hilbroy Advisory Inc., Civil Action No. 1:12-cv-12334 (D. Mass.)

SEC Charges Company based in Massachusetts and Canada and Other Parties in Stock Pump-and-Dump Scheme Involving Fictitious Buyout Offer

The Securities and Exchange Commission filed an enforcement action on December 17, 2012, in federal court in Boston charging Spencer Pharmaceutical Inc., its officers, and several other parties for their roles in a “pump-and-dump” scheme involving Spencer’s stock. The Commission’s complaint alleges that Jean-François Amyot, a Canadian resident who controlled Spencer, orchestrated the scheme and worked with Maximilien Arella and Ian Morrice, Spencer’s officers and directors, as well as IAB Media Inc. and Hilbroy Advisory Inc., two other companies controlled by Amyot, to create and disseminate false press releases, including press releases about a fictitious buyout offer for Spencer, and to otherwise promote Spencer’s stock. The Commission alleges that the promotional campaign pumped up the price of Spencer’s stock, and Amyot benefited by dumping his own Spencer stock at artificially inflated prices.

Freedom Investors Corp., Joel Reid Blumenschein and Gary Lee Gossett – Florida Penny Stock Fraud, Breach of Fiduciary and Breach of Heightened Supervision FINRA Arbitration and Litigation Attorney

Published on: December 12, 2012 | By Russell L. Forkey, P.A.

Freedom Investors Corp. – Brookfield, Wisconsin, Joel Reid Blumenschein – Pewaukee, Washington and Gary Lee Gossett – Spokane, Washington:

The Financial Industry Regulatory Authority, Inc. (FINRA) is a self-regulatory authority assigned the responsibility, by the Securities and Exchange Commission, to license, regulate and discipline securities broker/dealers and their employees, including account executives. In the event that FINRA elects to institute and enforcement action, firms and licensed individuals have the responsibility to reflect such action of their U-4 and/or U-5 filings, which can be viewed on the FINRA website under the broker-check section of the site or by viewing the monthly disciplinary information also provided on the FINRA site.

The monthly disciplinary information is referenced on the site generally in alphabetical order. This post relates to the following company or individuals. If the reader would like to review the entire FINRA release or the broker-check information concerning this matter, you can follow these highlighted links:

Joseph P. Cillo – Dade City and Tampa, Florida Penny Stock and Reverse Merger Fraud and Misrepresentation FINRA Arbitration and Litigation Attorney

Published on: December 5, 2012 | By Russell L. Forkey, P.A.

SEC v. Joseph P. Cillo:

The Securities and Exchange Commission (“Commission”) recently announced that the Honorable James D. Whittemore, United States District Judge for the Middle District of Florida in Tampa has entered final judgment against defendant Joseph P. Cillo (“Cillo”) of Dade City, Florida. The judgment permanently enjoins Cillo from further violations of Section 15(b)(6)(B)(i) of the Securities Exchange Act of 1934 (“Exchange Act”), imposes a statutory penny stock bar on him pursuant to Section 21(d)(6) of the Exchange Act, and orders that he pay disgorgement in the amount of $20,000 with prejudgment interest thereon in the amount of $1.124.50 within 30 days. In addition, Cillo was ordered to pay a civil penalty in the amount of $60,000 within 30 days. Cillo consented to the final judgment without admitting or denying the allegations of the Commission’s complaint.

The Complaint alleged that in November 2007, through a reverse merger with a penny-stock shell company, Cillo became the CEO and controlling shareholder of eFUEL EFN Corp. (“eFUEL”), a purported web development company then based in Tampa, Florida and listed on the OTC Market Group’s “OTC Pink” market tier (formerly the “Pink Sheets”) under the symbol “EFUL.” It further alleged that in connection with an ongoing market manipulation investigation involving eFUEL and other related entities and individuals, the SEC determined that Cillo engaged in various activities related to, and for the purpose of, issuing, trading, and inducing the purchase of eFUEL’s stock. Specifically, Cillo (1) offered and/or issued hundreds of millions of shares of eFUEL stock to third-parties as purported payment for debts and services, (2) drafted and approved multiple press releases touting the company’s business plan and development prospects, and (3) prepared, signed, and submitted periodic reports to the OTC Markets Group in order to comply with the Pink Sheets’ minimal requirements for “adequate current information.” These activities constituted violations of a 1995 Commission order which barred Cillo from participating in the offering of any penny stock.