|  | | 2007 News and Press Releases | | |
HEADLINE NEWS:
FBI-SEC Action Leads to Kickback Cases, After five separate sting operations involving penny stocks, SEC files civil actions against 7 individuals and 3 firms, while 6 people are hit with criminal charges.
Stephen Taub and Roy Harris
cfo.com. December 10, 2007
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EXCERPT: Federal regulators, targeting five separate schemes that involved penny stocks and alleged kickbacks to a fictitious hedge fund, have criminally indicted six individuals and filed civil charges against 10 individuals or companies they controlled. The Securities and Exchange Commission said the schemes were uncovered in a Federal Bureau of Investigation sting operation that is part of a recent cooperation agreement between the FBI and the SEC. The criminal prosecutions were conducted by the U.S. attorney’s office for the Southern District of Florida. According to the commission, the individuals charged are insiders or promoters of publicly traded companies, and live in Florida, New York, California, or Nevada. The individuals made stock sales to a person they believed to be the manager of a West Palm Beach, Calif., hedge fund, Fillmore Capital, paying the manager illegal kickbacks. In reality, however, Fillmore Capital was not a hedge fund, and the manager was an undercover FBI agent. "This case illustrates the commission’s ability to work together with criminal authorities in creative ways to uncover fraudulent schemes and to protect our markets," said Linda Chatman Thomsen, director of the SEC's Division of Enforcement. |
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