Stock Trader Looking at 25 Years
SAN DIEGO (CN) - A New Jersey stock trader pleaded guilty Tuesday to conspiring with the CEO of a San Diego company in a $28 million fraud against stockholders, the U.S. Attorney's Office said.
Mark Allen Lefkowitz pleaded guilty to "conspiring with the chief executive officer of a San Diego-based company to defraud the company's own shareholders," prosecutors said in a statement. "Court documents refer to the chief executive officer simply as 'CEO' and his company as 'Company A' because neither has been charged with a crime to date. The plea is subject to final acceptance by United States District Judge Irma E. Gonzalez.
"According to court documents, Lefkowitz and the CEO manipulated the company's share price and volume to benefit corporate insiders at the expense of shareholders. As a result of the fraud, the company issued more than 9 billion new shares of its stock that it did not register with the Securities and Exchange Commission ('SEC'). These new, unregistered shares diluted the value of existing shares, causing them to drop in value by as much as $7 million. At the same time, Lefkowitz received free-trading shares from the company which were worth more than $28 million, according to documents filed by the SEC."
Lefkowitz, 44, of Colt's Neck, N.J., faces up to 25 years in prison at his Feb. 4, 2013 sentencing. He also must pay restitution.