SEC Sues Stock Promotion Firm Over Sham Information
The Securities and Exchange Commission has brought up a case against stock promotion firm Wall Street Capital Funding LLC (WSCF), together with its top executives and associates, for allegedly distributing sham information about phony energy companies.
In a lawsuit filed by the SEC before the US District Court for the Southern District of Florida, the commission said the defendants have knowingly or recklessly played a critical role in numerous penny-stock scams. Philip Cardwell and Roy Campbell, executives of the stock promotion firm, together with associate Aaron Hume, created and distributed promotional material for a supposed oil-exploration and -development company known as PrimeGen Energy Corporation from April 2009 to January 2010, the SEC said.
PrimeGen was actually a sham energy firm. The SEC claimed that its headquarters were “rented mailbox in a UPS Store opened with a do-not-forward instruction.” The supposed web page of the phony company was also alleged to be fake, its source code coming from the website of another company.
The sham information disseminated by the stock promoters included positive opinions about PrimeGen’s penny stock, its revenue, and the position of the stock in the future.
The defendants all agreed to settle SEC’s charges.
Earlier, the SEC has also charged another stock promotion entity for failing to disclose to investors the profits gained from promoting hyped stocks unloaded from the account of its owner.
Christopher Wheeler, from Victor, New York who owns OTCStockExchange.com allegedly hid the amounts paid to him by certain issuers to promote their stock while at the same time liquidating millions of his own shares for profits amounting to more than $2.95 million.
The SEC stated in a related lawsuit that the stock promotion website had been promoting “thinly-traded penny stock” and professing the data was a compilation of a “long list of successful stock picks.” The website received undisclosed payments for it from 2007 t0 2008.
The stock promotion entity similarly conceded to SEC’s settlement by paying the fines and disgorgement of ill-gotten gains.