The SEC called for an emergency asset freeze on two accounts, which hold assets of approximately $2 million. The brokerage accounts hold ill-gotten proceeds from a fraudulent EDGAR filing.
The SEC tracked an EDGAR system filing in May 2015 about a fraudulent Avon tender offer to a foreign company in Bulgaria. Nedko Nedev, a Bulgarian trader, managed at least one of the two frozen accounts. His account held a significant amount of Avon contracts-for-difference (CFDs) that were declining in value. Avon CFDs spiked 20 percent after the EDGAR filing was made. Nedev sold almost half of his Avon CFDs during the temporary rise in value, creating about $5,000 in ill-gotten profits.
The SEC charges Nedev as a defendant in this case as well as Strategic Capital Partners Muster Ltd., Strategic Wealth Investments Inc., PTG Capital Partners LTC, and PST Capital Group LTD. All defendants were charged for contributing to the manipulation of Avon stocks. This Avon scheme was conducted in the same manner as prior schemes involving Rocky Mountain Chocolate Factory in 2012 and Tower Group International in 2014, both of which the defendants are held responsible.
“We used parallel trading analysis to connect the dots and track down these defendants,” stated Daniel Hawke, Chief of the SEC Enforcement Division’s Market Abuse Unit. “Even when traders attempt to hide behind proxy servers, false filings, and phony foreign entities, we are able to quickly identify patterns and relationships to focus our investigation and identify who is behind the manipulative trading.”
The defendants are charged with violating Section 17(a) of the Securities Act of 1933, Section 10(b) and 14(e) of the Securities Exchange Act of 1934, and Rules 10b-5 and 14e-8. Nedev was charged with control person and other secondary liability under Section 20 of the Exchange Act.
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.