The SEC sued microcap stock sellers, alleging that ‘pump & dump’ ...
The SEC sued microcap stock sellers, alleging that “pump & dump” schemes aided by Internet message boards netted them $873,000. Faisal Zafar and Sameer Thawani sold 24 microcap stocks by hyping stocks with online messages that “preyed on public…
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fears about terrorism and international health epidemics.” For example, Zafar and Thawani said one issuer had a Dept. of Homeland Security contract for N.Y.C. subway security, and another was acquiring a maker of bird flu vaccine, SEC alleged. Defendants bought stocks, created at least 300 online aliases, and posted over 1,000 messages with fake news headlines and press release excerpts about business contracts, mergers and strategic alliances, the suit said. The sellers are accused of posing as Internet message board moderators and e-mailing news of stock opportunities to people registered on the board. The U.S. Dist. Court, Brooklyn issued a temporary restraining order against the defendants, froze their assets and set a hearing date on a commission motion for a preliminary injunction.