The SEC charged 15 individuals and 19 entities as defendants in a case involving multiple schemes to manipulate microcap stocks. The defendants were comprised of six firms, several customers, stock promotors, and two microcap issuers. Some defendants acted as broker-dealers for customers who wanted to conceal their stock ownership and artificially inflate the market for microcap securities to make a wrongful profit. The 34 defendants were charged with fraud, manipulative trading, touting, and registration violations. Nine defendants were also criminally charged in parallel cases.
Moneyline Brokers, a firm in Costa Rica, and its founder Bailey Gallison II, allegedly helped customers in “pump and dump” manipulation schemes by accepting transfers from the customers and reissuing the stocks in the firm’s name, which artificially inflates the stock price. Then, the firm sells its own shares for a profit after the stock value wrongfully rises.
Carl Kruse Sr. and Carl Kruse Jr. collaborated with Moneyline Brokers and other firms to increase stock prices in Warrior Girl Corp., a company that was, at different times, involved with hydroelectric power, oil extraction, and online education. While controlling Warrior Girl, the Kruses fraudulently campaigned the company to inflate stock prices. The Kruses raised $2.3 million in ill-gotten profits from the multiple manipulations of Warrior Girl stock.
Another manipulation scheme involved Everock, Inc., which reorganized itself with Nature’s Peak. Three individual defendants brought in $2.5 million in profits after heading a marketing campaign that artificially raised the value of Everock stocks.
The SEC requires that all defendants return all ill-gotten profits, plus interest. In addition, the SEC is seeking civil monetary penalties and to bar some defendants from the market and from serving as officers or directors in a public company.
If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.