SEC brings additional charges in multimillion dollar boiler room schemes

The SEC announced on September 23rd that it is bringing new charges in New York-based multimillion dollar boiler room schemes. The allegations state that Benjamin Conde arranged the manipulation of millions of shares of the company Renewable Energy and Power Inc., an action which resulted in generating $3.1 million in illegal proceeds.

According to the SEC, the entire scheme became when Mr. Conde bought large amount of RBNW shares via convertible notes, which he purchased from RBNW by Essex Global Investment Corp. The latter, it became known, was controlled by Conde himself, who is a securities fraud recidivist.

The SEC alleges that Mr. Conde paid a boiler room in New York to advertise the RBNW stock to multiple investors, who were usually unsophisticated about the deal. That increased both the price of the shares, as well as their trading volume.

Besides trying to pump up the price of the stock, Conde participated in fraudulent trading activity by trading against the victims of the boiler room through encrypted messaging techniques – a tactic that actually boosted the RBNW’s stock share price even further.

In total, Mr. Conde is accused of selling more than 8 million RBNW shares in this manner, an act that resulted in generating millions in illicit profits. The securities fraud recidivist tried to hide the source of these payments to the New York boiler room by paying an intermediary pursuant to made-up invoices.

Conde has been charged with fraud and market manipulation. The SEC filed its complaint with the Central Islip, New York. As reported by the SEC, the financial regulator is looking for:

 …….permanent injunction, return of allegedly ill-gotten gains with interest, civil penalties, and a penny-stock bar.

This is not the first time in which the SEC is bringing charges in boiler room schemes. Back in July 2017, the SEC brought charges for two boiler rooms and 13 people. In November 2018, the SEC charged again one of the boiler rooms and four more individuals involved in a scheme that generated around $3.3 million in illegal profits. There were also other cases of broiler room-related charges by the SEC.

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