SEC stops Covid-19 microcap fraud scheme

The Securities and Exchange Commission filed an emergency action and froze the assets of five individuals and six offshore entities for a fraudulent scheme that generated $25 million from illegal sales of multiple microcap companies’ stock. Several of them were subject of recent SEC trading suspension orders: Sandy Steele Unlimited Inc., WOD Retail Solutions Inc., Bioscience Neutraceuticals, Inc. and Rivex Technology Corp.

The SEC alleges that from January 2018, Nelson Gomes, working with Michael Luckhoo-Bouche and others, enabled corporate control persons that were unknown to the public to conceal their identities while dumping their company’s stock into the market. The SEC claims that these illegal stock sales were often advanced by promotional campaigns. Some of them even included false and misleading information about the COVID-19 pandemic. SEC’s complain also charges Canadians Shane Schmidt, Douglas Roe and Kelly Warawa with fraudulently dumping shares of Sandy Steele.

Online marketplace Trustify Inc. and its founder charged in $18.5 million fraud

Paul Levenson, Director of the SEC’s Boston Regional Office commented:

Microcap stocks can be particularly vulnerable to manipulative schemes, and investors should be alert to the heightened risks that exist during this national emergency. The SEC will continue to act quickly to protect investors from investment scams, including those seeking to capitalize on the COVID-19 crisis.

The SEC’s complaint charges Gomes, Luckhoo-Bouche, Roe, Warawa, FFS Capital Limited and Atlantean Management Corporation with violating the antifraud and registration provisions of the federal securities laws. It also charges Schmidt with violations of the antifraud provisions and Paifang Trading Limited, Artefactor Limited, Meadow Asia Limited and Thyme International Limited with registration violations. The Commission seeks permanent injunctions, conduct based injunctions, disgorgement of allegedly ill-gotten gains plus interest, civil penalties and penny stock bars.

Read More:

Read Also: