South Florida Arbitration & Litigation Lawyer Blog
South Florida, including Boca Raton, West Palm Beach and Royal Palm Beach Microcap Investment and Security Fraud and Misrepresentation Litigation Attorney
Securities and Exchange Commission v. David Carven et. a. Civil Action No. 15-cv-1820 (S.D.N.Y.)
SEC Files Emergency Action Against Father and Son Behind Pump and Dump Scheme, Obtains Asset Freeze
The U.S. Securities and Exchange Commission recently filed an emergency action ex parte against David Craven and Alex J. Craven, a father and son who manipulated the public market for shares of microcap issuer American Energy Development Corp. (AEDC) in violation of the securities laws. The Complaint alleges that by the middle of 2011, David Craven and Alex Craven, who are British citizens residing in Switzerland and England, respectively, gained control of over 87% of the purportedly non-restricted shares of AEDC through nominee companies under their control. Then, between October 2011 and February 2012, the Cravens inflated AEDC’s share price through deceptive “wash trading” and “matched trading.” Shortly thereafter, they secretly funded a $1.6 million promotional campaign for AEDC stock that involved a 16-page mailer being sent nationwide in April and May 2012 to 1.2 million U.S. residents. The Cravens’ deceptive trading and the mailer’s rosy predictions succeeded in driving up the price for and daily trading volumes in AEDC stock, which allowed the Cravens to dump over $4 million worth of artificially inflated AEDC stock on unsuspecting investors through numerous overseas trading accounts under their control.
The SEC’s Complaint alleges that the Cravens violated Sections 17(a)(1), (2) and (3) of the Securities Act of 1933 and Sections 9(a)(1) and (2) and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5(a) and (c) thereunder. The SEC’s Complaint also names David Craven’s wife, Anna Craven, as a relief defendant.
According to documents filed simultaneously with the SEC’s Complaint in federal court in Manhattan, David Craven is actively attempting to sell property he owns jointly with Anna Craven in Florida. The Court’s order freezes David Craven’s and Anna Craven’s U.S. assets. Pursuant to the order, the Commission has taken immediate action to freeze David and Anna Craven’s U.S. assets, which include property in Florida and Kentucky and a bank account in Florida.
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