On March 6, three individuals, together with the previous CEO of Riot Blockchain, John O & # 39; Rourke III, agreed settle with the USA Securities and Trade Fee (SEC) for $ 3.5 million over three alleged penny inventory pump-and-dump schemes.
Beneath the phrases of the settlement, Michael Brauser, John Stetson and O & # 39; Rourke disgorgement, curiosity prejudices, and civil fines. The trio won’t admit or deny the allegations made within the SEC 2018 enforcement motion in opposition to the trio.
Prepare "Microcap fraudsters" with SEC
O & # 39; Rourke & # 39; s and Stetson every should pay a tremendous of greater than $ 1.15 million, whereas Brauser should pay round $ 1.17 million.
O & Rourke, O & Rourke & # 39; s firm ATG Capital, Brauser & Brauser & # 39; s Grander Holdings are completely banned from collaborating in all penny inventory providing actions whereas Stetson and Stetson Capital Investments is forbidden to be concerned within the provision of penny inventory for 10 years.
The decide additionally made a partial judgment in opposition to HS Contrarian Investments – an organization of which Stetson was the director.
O & # 39; Rourke left Riot Blockchain in September 2018 after the SEC enforcement motion in opposition to him. O & # 39; Rourke was changed by Riot & # 39; s then operational officer Chris Ensey.
Riot Blockchain investor is claimed to have focused the manipulation of cent shares
The three people and 4 corporations are the final to settle the case – bringing prices in opposition to 10 people and 10 enterprise entities concerning three alleged pump-and-schemes developed by enterprise capitalist and Riot Blockchain – investor Barry Honig.
The group of 20 individuals and firms could be greater than $ 27 million in revenue via coordinated manipulation of three microcap cent shares. The SEC described their actions as "brutal market manipulation" whereby "harmless traders (who) have been left behind held nearly nugatory shares".
The SEC claimed that Honig orchestrated the acquisition of huge sums of shares from issuers of shares at decreased costs, earlier than he and his associates carried out unlawful promotional actions and manipulative buying and selling to artificially elevate the share value of every issuer after which the shares look of lively buying and selling quantity, "then" (dump) their shares within the inflated market. "