GTX Founder Convicted Of Massive Fraud

GTX Founder Convicted Of Massive Fraud - 5/19/2009

Home

Index of Filings

News and Press Releases

Filings

Decisions

Settlements

Litigation Activity Indices

Top Ten List

Annual/Quarterly Updates

Clearinghouse Research

Articles & Papers

Search

Related Sites

About Us

Local Rules

Sponsors

Register

_______________
Copyright © 2001
Stanford Law School

2009 News and Press Releases

SEARCH

News	News 2009
HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

HEADLINE NEWS:

GTX Founder Convicted Of Massive Fraud
Samuel Howard

Securities Law 360. May 19, 2009
_________________________________________________________________________

EXCERPT: David A. Hagen, the founder and former president of technology company GTX Global Corp., has reportedly been convicted of operating a pump-and-dump scheme that swindled investors of more than $28 million and now faces a maximum sentence of 45 years in jail. A federal judge convicted Hagen Tuesday of conspiracy to commit securities fraud, conspiracy to commit wire fraud and conspiracy to commit money laundering, Dow Jones reported. In January 2007, federal prosecutors filed suit in the U.S. District Court for the Western District of North Carolina alleging Hagen fraudulently promoted GTX stock and reaped tens of millions of dollars when he unloaded millions of shares as the stock price peaked, according to the affidavit. In 2005 Hagen and others created offshore shell companies to act as repositories for GTX stock and set about posting false and misleading promotional materials regarding GTX, purportedly an intellectual property technology company, according to the affidavit. Fabricating impressive projections, Hagen touted the company’s prospects on numerous Web sites created for the purpose of hyping GTX and issued fraudulent press releases representing that the company had merged with another technology player, the affidavit says. “For example, the Web sites contained outlandish and unrealistic projections regarding the future stock price of GTX, and misrepresented, in the disclaimer section, the ownership of GTX shares by the parties preparing the projections,” the affidavit said. “These promotional materials all omitted the fact that the co-conspirators had obtained control of large quantities of the securities being promoted in anticipation of their intended plan to conduct a promotional campaign … and profit on the sale,” the affidavit said. The promotional campaign included spam e-mail and mass faxes, classified interstate wire transmissions, as well as the fallacious press releases and Web postings, the affidavit says.

Back to News page | Back to Archived News 2009 page | Back to Top

�