Spartan Securities Group and Island Capital Management charged with bogus companies’ fraud


Ex-Convoy Global Executive Directors and broker’s general manager charged with fraud

The U.S. Securities and Exchange Commission (SEC) opened charges against Spartan Securities Group, Ltd., a broker-dealer, and Island Capital Management LLC, a transfer agent, which also operates as Island Stock Transfer, for creating and selling a minimum of 19 bogus public companies.

The scheme was initiated by Spartan Securities, which filed documents with the Financial Industry Regulatory Authority (FINRA) requesting for permission to list the common stock of the sham companies, which the allowed the firm to sell the shares to public investors.

The SEC has also charged Micah J. Eldred and Carl E. Dilley who were principals at Spartan Securities for signing the fake application knowing that they were fraudulent, or for not doing their due diligence before appending their signatures to the applications

David D. Lopez has also been charged for failing to investigate the warnings issued by FINRA regarding the fake companies as he did not bother to get a clear understanding of the companies being registered.

According to the SEC, Dilley and Island Stock Transfer collaborated in selling the stock of a minimum of 12 of the bogus companies by issuing and transferring the ‘free-trading’ stock of such companies in bulk.

Eric I. Bustillo, the Director of the SEC’s Miami Regional Office commented that:

Broker-dealers are critical gatekeepers protecting the integrity of our markets, with obligations under our rules to fulfill that role.

We allege, however, that Spartan Securities and three of its principals failed as gatekeepers by enabling multiple illicit supply chains of undisclosed blank check companies.

Related News

arrow

Spartan Securities Group and Island Capital Management charged with bogus companies’ fraud

3

Send this to a friend