SEC alleges penny-stock firm defrauded investors of $250 million
Article Abstract:
The Securities and Exchange Commission, heightening its effort to crack down on penny-stocks frauds, alleged that 41 defendants fraudulently manipulated the prices of small company stocks and bilked investors out of $25 million. In the latest allegations, made in 10 civil lawsuits in federal courts around the country and in three SEC administrative proceedings, the SEC turned its focus from securities broakers to company officials who deceive investors. Several of the cases involve a classic "pump-and-dump" scheme where company insiders fraudulently touted a stock, then sold shares while the stock rallied and other unsuspecting investors bought the shares. In many of the cases, the share price plummeted once the company insiders removed their support. In 8 of 13 cases, the SEC halted the trading of the security in question because of suspected manipulation.
Comment:
SEC turns its focus from securities broakers to company officials who deceive investors
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1998
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Stratton debacle produces record award
Article Abstract:
A group of former Stratton principals and employees were ordered by a securities-industry arbitration panel to pay $13.1 million to a defrauded investor in Indiana. The award is the largest ever granted to an investor in a similar type of case. Stratton is a defunct brokerage company. The individual investor, Edward H. Howard, was given the award which included punitive damages of $10.1 million.
Comment:
Former Stratton principals and employees ordered by securities-ind arbitration panel to pay $13.1 million to defrauded investor
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
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