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SEC Files Charges in International Manipulation Scheme

Posted on May 16, 2018 at 7:55 AM

The SEC charged four individuals for their roles in a fraudulent scheme that generated nearly $34 million from unlawful stock sales and caused significant harm to retail investors. 

Per the SEC’s complaint, the defendants:

  • manipulated the market for and illegally sold the stock of microcap issuer Biozoom Inc.;
  • hid their ownership and sales of Biozoom shares by using offshore bank accounts, sham legal documents, a network of nominees, anonymizing techniques, and other deceptive practices;
  • allegedly directed a wide-ranging promotional campaign and employed sophisticated, manipulative trading techniques to artificially inflate Biozoom’s share price.  

The alleged scheme culminated in the defendants’ illegal sales of Biozoom, which netted them nearly $34 million in unlawful proceeds.

The SEC’s complaint, which was filed in federal district court in the Southern District of New York, charges Francisco Abellan Villena, Guillermo Ciupiak, James B. Panther Jr., and attorney Faiyaz Dean with violating antifraud and registration provisions of the federal securities laws and seeks monetary and equitable relief. The SEC previously obtained a judgment against Abellan for his role in another market manipulation scheme. In separate actions, the SEC charged two registered representatives for their roles in the unregistered sales of Biozoom stock and a brokerage firm for supervisory and recordkeeping failures.

The SEC obtained a court order in 2013 freezing proceeds from the unlawful Biozoom sales. It subsequently obtained a default judgment and established a fair fund, which has returned more than $14 million to harmed investors. The SEC also previously charged a lawyer and officer of Biozoom’s predecessor entity.

Read More:
Release
https://www.sec.gov/news/press-release/2018-85" target="_blank">https/www.sec.gov/news/press-release/2018-85

Order
http/www.sec.gov/litigation/admin/2018/33-10495.pdf

Complaint
http/www.sec.gov/litigation/complaints/2018/comp-pr2018-85.pdf

Categories: Fraud