Podcast Center
Video Center
Webcasts
Resource Center
Events
July 11, 2014 at 10:45 AM
The Securities and Exchange Commission, the U.S. Attorney for the District of Massachusetts, and the Federal Bureau of Investigation announced charges against five individuals Friday whose attempt to manipulate shares of Boston-based Amogear Inc. was caught by an FBI undercover operation.
According to the SEC and criminal cases filed in federal court in Boston, the defendants knew that Amogear was a shell company without any real operations, but schemed to boost its price and profit by selling their own shares.
“What the parties didn’t know was that the FBI controlled Amogear and used it to obtain evidence of attempted stock manipulation,” the SEC said in a statement. “To protect investors, the SEC suspended trading in Amogear’s securities on Feb. 10, as the attempted stock manipulation was underway.”
According to the SEC, the charges follow a series of cases since December 2011 in which the SEC suspended trading in seven companies and criminal authorities charged 22 individuals with using kickbacks and other schemes to trigger investments in microcap stocks, convicting 18 to date.
Small “microcap” companies often trade for pennies per share, and many do not file financial reports with the SEC. “The fact that investors often cannot find accurate information about microcap companies can make the microcap stock market a fertile ground for fraud and abuse,” the SEC said.
“This case is an outstanding example of law enforcement creativity and cooperation trumping microcap fraudsters,” Andrew Ceresney, director of the SEC’s Enforcement Division, said in a statement. “By obtaining control of a shell company, using it to collect evidence of a manipulation scheme, and suspending trading before the scheme succeeded, we have protected investors from harm.”
