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You may have lost money in your investment portfolio,
due to mismanagement and not even know it.

SEC prosecutes another penny stock manipulation case

The way that some penny stocks and blank check companies are advertised, who wouldn’t want to invest in them? After all, the possibility of investing less than $100 and being able to garner thousands in profits may be too good to be true. But like the old adage, if something seems too good to be true, it probably is.

Against this backdrop, attorneys for the Securities and Exchange Commission (SEC) have filed a request to amend their complaint to include additional brokers in a penny stock manipulation case. The SEC alleges that several brokers, including an attorney, facilitated a scheme through their brokerage firm. The SEC alleges that the attorney profited illegally from selling unregistered shares of CodeSmart Holdings stock despite not having a registration exemption. 

Apparently, their plan was to tout the potential of CodeSmart so that its price would grow. They also conspired to purchase shares at a pre-set price. So when the stock price fell, the initial investors would profit while other investors lost their money.

The amended complaint asks the court to order a disgorgement of profits illegally obtained through the manipulation scheme, and for the imposition of penalties and interest based on the violations.

While the SEC’s action exemplifies the federal government’s action against corrupt brokers, but an individual attorney may be necessary to secure reimbursement of funds lost through such a scheme. If you have lost money through a penny stock scheme or have been duped into investing in a blank check company, an experienced securities fraud attorney can help.

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