Business
SEC Litigation Release
SEC Litigation Release.
About this update from Starfleet Innotech Inc.
[{"type":"text","content":"U.S. SECURITIES AND EXCHANGE COMMISSIONLitigation Release No. 22018 / June 30, 2011SEC v. Brian Gibson, Civil Action No. 0:11-cv-61458-WPD (U.S. District Court for the Southern District of Florida)SEC v. Douglas Newton and Real American Brands, Inc., n/k/a Real American Capital Corp., Civil Action No. 0:11-cv-61455-WJZ (U.S. District Court for the Southern District of Florida)SEC v. Donald W. Klein and KCM Holdings Corp. Civil Action No. 0:11-cv-61457 (U.S. District Court for the Southern District of Florida)SEC v. Thomas Schroepfer a/k/a Thomas Schroepfer Baetsen, Charles Fuentes, and Smokefree Innotec, Inc., Civil Action No. 0:11-cv-61454 (U.S. District Court for the Southern District of Florida)The Securities and Exchange Commission today charged three CEOs, their companies, and two penny stock promoters with securities fraud for their roles in various schemes to manipulate the volume and price of microcap stocks and illegally generate stock sales. The schemes featured illicit kickbacks, a bribe to a purported corrupt broker, and the creation of a website to deliver e-mail blasts to potential investors. The SEC worked closely with the U.S. Attorney's Office for the Southern District of Florida and the Federal Bureau of Investigation as the separate schemes were uncovered through an FBI undercover operation. The operation was conducted in such a way that no investors suffered harm. The U.S. Attorney's Office today announced criminal charges against the same individuals facing SEC civil charges.According to the SEC's complaints filed in U.S. District Court for the Southern District of Florida, most of the schemes involved the payment of kickbacks to a purportedly corrupt pension fund manager, in exchange for the fund's purchase of restricted shares of stock in the various microcap companies. Another scheme involved a bribe that was to be paid to a purported corrupt stockbroker who agreed to use his ability to buy stock in his customers' discretionary accounts to purchase a microcap company's stock in the open market. What the insiders and promoters did not know was that the people with whom they arranged these illegal transactions were actually undercover FBI agents or confidential sources participating in an undercover operation. A final scheme involved a stock promoter who created a website to tout a penny stock company throu...