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SEC Slams Penny Stock Scam

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Online Trading Stock And The SEC continues to target penny stock schemes.If you would like to receive late breaking business news covered by AXcess News then you need to subscribe. Membership is free.

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Published by IEEE Security & Privacy The most rapidly growing spam category, stock spam, is a modern twist of the classic "pump and dump" securities scam in which unscrupulous characters manipulate a security's price by using various advertising techniques to create artificial demand for it, thus inflating price. By targeting thinly traded securities on unregulated markets, stock spammers can almost guarantee a flash mob attracted by the spam will increase the per share price. spam solutions deploy to stop them.

Stock System Trading June 19, 2005 (AXcess News) New York - The SEC continues to target penny stock schemes. On May 31, 2005, the Commission obtained a preliminary injunction in California federal court, enjoining: George A. Todt of Malibu, California; Sutra Management Corporation; Jeffrey H. Evans of Napa, California; Jetco, LLC; Ray J. Slaback of Dakota, Minnesota; Tempo Financial, Inc.; STB Chip Company; SutraTel Kiosk Corporation (f/k/a Urban Transfer Systems, Inc.);
Lonisson Communications Corporation; Sutra Group, LLC; and PageOne Business Productions, LLC from violating federal securities laws. The Court Order granting that injunction also prohibited Todt, Sutra Management, Sutra Group, PageOne, Evans, Jetco and Slaback from participating in penny stock offerings.

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Stock Investing Game According to the Commission's complaint, Todt was central to two fraudulent schemes. In the first, which occurred from March 2003 through at least October 2004, Todt and others allegedly inflated the price of Quality of Life Health Corporation (QLHC) stock by issuing press releases that claimed, falsely, that QLHC owned approximately $60 million worth of assisted living facilities. Those claims apparently were echoed on the QLHC website. The SEC says that Todt and others profited from increasing stock prices as investors responded to the phony information by buying QLHC shares. Todd allegedly pocketed at least $800,000 in profits by trading QLHC shares through a nominee account and by splitting profits with traders who received their QLHC stock through Todt.

ChoicePoint's board approved the stock trading plan on Oct. 26, 2004, the day before Los Angeles police, who had been tipped off by ChoicePoint, arrested Oluwatosin. A company spokesman told the newspaper that the stock sale was part of a routine estate planning and asset diversification, and denied there was any insider trading or other wrongdoing. The week that ChoicePoint's security problems became public in late February 2005, the company's share price fell about 10 percent.

Market Stock Trading The second scheme, which began around November 2004 and was still ongoing when the SEC sought the preliminary injunction in this case, purportedly centered on efforts to evade securities registration requirements and issue unregistered securities of four penny stock companies quoted on the Pink Sheets - Tempo Financial, Inc., STB Chip Co., SutraTel Kiosk Corp. (f/k/a Urban Transfer Systems, Inc.) and Lonisson Communications Corp.Once again, Todt allegedly disseminated false and misleading information in order to create a buzz for the four penny stocks and boost their share prices. This time, again according to the SEC, Todt and his cohorts also attempted to manipulate the market for shares in three of the companies. On March 28, 2005, the Commission entered orders suspending trading in all four of the penny stock companies. At the time, the SEC said that it was issuing the suspensions because questions had arisen concerning market manipulation and the improper distribution of securities.

Online Stock Trading Canada Source: Stockpatrol

Stock Investing Basics AXcess News will be reporting on any new market trends related to this story. Members should watch their in-box for late breaking business news. If you're not a member, consider joining now.

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