Stock Promoters Accused in Pump-and-Dump Scam
The US Securities and Exchange Commission has filed fraud charges against James M. Farinella, his Integrated Capital Partners Inc., Anthony Amado, and his Equity Awareness Group with fraud over the alleged inflation and manipulation of a microcap company’s share price. As a result of the alleged pump-and-dump scam, the fraud made over $1M.
According to the regulator, Farinella and his consulting firm controlled almost the whole public float of stock in Pazoo Inc. Farinella paid Amado’s company to promote the microcap issuer and take part in matched trading to make it appear as if there was market activity for the stock. Amado and one of his employees, Carlo Palomino, are accused of enacting the scam, which allowed Farinella to make over $1M when dumping the Pazoo shares.
New Jersey prosecutors have filed criminal charges against Farinella over the microcap fraud allegations.
NJ Stock Promoter Pleads Guilty in Massachusetts
Antonio Katz, who is also a defendant in an ongoing, related SEC case, has pleaded guilty to criminal charges in Massachusetts. Katz was charged with conspiracy and securities fraud related to a pump-and-dump scam that bilked Greenway Technology investors. The Las Vegas-based company was touted as running resorts for lesbian and gay vacationers. Katz’s sentencing is scheduled for next year.
The SEC charged Katz and Jehu Hand in 2015. The regulator accused them and co-scammers of selling Greenway stock without the required registration statements and of artificially raising prices through material collateral, including news releases and e-mails that included fake and misleading information.
They also are accused of taking part in undisclosed coordinated trading of Greenway Technology’s stock to make it seem as if the shares were in demand despite the fact that the company lacked assets and wasn’t even in operation at the time.
After Greenway’s stock price became inflated, the fraudsters sold over 12 million net shares of the stock to the public, making over $850K. The SEC continues to pursue disgorgement, interest, and penalties against both Hand and Katz. It also wants penny stock bars and permanent injunctions.
SEC Accuses Mechanical Engineer of Rigging Fitbit Stock
Robert Murray, a mechanical engineer, is accused of involvement in a scam to manipulate Fitbit’s stock price through the submission of a bogus regulatory filing. The SEC brought fraud charges against Murray last month.
According to the regulator’s complaint, Murray bought Fitbit call options minutes before a bogus tender offer that he submitted through the Commission’ EDGAR system. The fake offer claimed that ABM Capital LTD wanted to acquire Fitbit shares at a premium price.
This caused the price of Fitbit stock to temporarily go up after the tender offer became available to the public. Murray made about $3,100 when selling all of his options.
The U.S. Attorney’s Office for the Southern District of New York has brought parallel criminal charges against Murray.
SEC Files Fraud Charges Against Stock Promoters in Market Manipulation Scheme, SEC.gov, June 21, 2017
Read the SEC Complaint (PDF)