SEC Raps Several CEOs for Securities Fraud
The US Securities and Exchange Commission has charged several CEOs and their companies, and three penny stock promoters with securities fraud for offering various illicit kickback and market manipulation schemes involving microcap stocks.
The defendants reside or are based in South Florida, California, Texas, Pennsylvania, New York, Virginia, and Nevada.
The SEC worked closely with the U.S. Attorney’s Office for the Southern District of Florida and the Federal Bureau of Investigation as the separate schemes were uncovered. The U.S. Attorney’s Office today announced criminal charges against the same individuals facing SEC civil charges.
According to complaints the SEC filed in the U.S. District Court for the Southern District of Florida, defendants Yan K. Skwara, Douglas D. Hague, Joseph J. Repko, Michael M. Cimino, Ryan F. Coblin, US Farms, Inc., Clean Coal Technologies, Inc., Sure Trace Security Corp., and Delivery Technology Solutions, Inc. engaged in schemes involving the payment of undisclosed kickbacks to a pension fund manager in exchange for the fund’s purchase of restricted shares of stock in the various microcap companies.
According to additional complaints also filed in the Southern District of Florida, defendants Robert L. Cotton, Harold Steven Bonenberger, Matthew A. Connor, Kevin P. Brennan, Donald G. Huggins, Marc S. Page, Cotton & Western Mining, Inc., Angel Acquisition Corp. n/k/a Biogeron, Inc., and Optimized Transportation Management, Inc. engaged in schemes involving an undisclosed bribe that was to be paid to a stock broker who agreed to purchase the microcap companies’ stock in the open market for his customers’ discretionary accounts.
In the complaint against defendants Scott A. Haire and Wound Management Technologies, Inc., the SEC alleges that the defendants engaged in schemes involving both an undisclosed kickback and bribe.
The SEC alleges that the defendants in the schemes involving undisclosed kickbacks understood they needed to disguise the kickbacks as payments to phony consulting companies, which they knew would perform no actual work. They also knew the fund manager owed a fiduciary duty to the fund. In the schemes involving the undisclosed bribes, the SEC alleges that the defendants knew their illegal activities were meant to artificially inflate the companies’ stock volume and prices.
The SEC is seeking permanent injunctions, disgorgement plus prejudgment interest, and financial penalties against all the defendants; penny stock bars against all the individual defendants, and officer-and-director bars against defendants Skwara, Hague, Cimino, Bonenberger, Brennan, and Haire.
The United States Attorney’s Office for the Southern District of Florida and the Federal Bureau of Investigation, Miami Division, helped in investigating these matters.