Broker Accused Of Pump-And-Dump Scheme

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Broker Accused Of Pump-And-Dump Scheme

Guy Gentile of Putnam Valley, New York allegedly ran a $17 million pump-and-dump stock scheme. Gentile faces federal counts of securities fraud and conspiracy to commit securities fraud. He was indicted late last month, according to U.S. Attorney Paul J. Fishman. The SEC filed a civil suit against Gentile late last month, as well.

Gentile’s alleged scam actually involved two different schemes from April 2007 to June 2008, according to the SEC.

Gentile is no longer a registered representative but was most recently registered with Stock USA Execution Services, Inc. in Carmel, New York.

According to the U.S. Attorney’s office, Gentile and two Canadian stock promoters, Itamar Cohen and Michael Taxon, artificially inflated the stock price of two publicly traded companies, Raven Gold Corporation and Kentucky USA Energy Inc.

Gentile, Cohen, and Taxon, gained control over a large portion of Raven Gold’s and Kentucky USA Energy’s free trading shares, according to the SEC. The three allegedly then used manipulative trading and misleading promotional materials to pump up the price of those shares, which they encouraged others to buy.

In classic pump-and-dump fashion, once prices were inflated, the group allegedly dumped the stocks by selling many of them to investors. Raven Gold’s and Kentucky USA Energy’s stock prices then plummeted, causing investors to lose money and Gentile’s group to profit by about $17.2 million, according to officials.

If found guilty, Gentile faces a maximum of 20 years in prison and a $5 million for the securities fraud charge, and an additional five years in prison and another fine for the conspiracy charge, officials said.

Cohen, 53, and Taxon, 52, each pleaded guilty in May 2015 to conspiracy to commit securities fraud.

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.

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