Investors Rue Liberty Silver Pump & Dump
WEST PALM BEACH, Fla. (CN) - Liberty Silver sold stocks "at an increased price, pocketing unlawful profits amounting to tens of millions of dollars," investors claim in Federal Court.
Lead plaintiff Todd Stanaford sued Liberty Silver Corp., Robert Genovese, Tiffeni Graves, Marnie Markin, Geoffrey Browne, BG Capital Group and Look Back Investments under the Securities Exchange Act.
"Genovese is believed to have used a pump and dump pattern of stock manipulations in Liberty Silver, as well as in numerous other schemes," the complaint states.
Clearly Canadian Brands, Neptune Society, Envoy Communications, Spectrum Sciences & Software, and American Lithium Minerals are just a few of Genovese's other alleged schemes. They are not parties to the lawsuit.
Stanaford says the other defendants "should have been known" or did know what Genovese was up to.
"Genovese is a penny stock promoter and is notorious for operating on the fringes of the financial markets, making millions of dollars by touting penny stocks," the complaint states. "He uses television shows, newsletters, false and misleading releases, and emails to pump up a stock, urging the public to invest in these stocks at artificially inflated rates driving the stock price higher."
When Genovese dumped "large blocks of stock at the artificially inflated prices," he reaped "tens of millions of dollars" in profits, according to the complaint. Meanwhile, stock prices plummeted, "leaving the general investing public with huge losses."
Genovese also had help in promoting Liberty Silver from John Thomas Financial founder Anastasios Belesis and celebrities like John Elway, Stanaford says.
Neither Belesis nor Elway are named as defendants.
Canadian-born Genovese allegedly "flew his private leer jet" to visit Belesis in New York. Stanaford says Belesis was flown by to the Bahamas where he "accepted $2,500,000 from Genovese to heavily sell John Thomas Financial owned Liberty Silver stock, to the detriment of the investing public, as well as purchase the 6,600,000 shares sold by Genovese on September 20, 2012."
The complaint notes that the Securities and Exchange Commission halted trading on shares of Liberty Silver in October 2012 "for a period of nearly two weeks resulting in the issuer being downgraded to the Grey Market pursuant to rule 15c2-11."
"According to the SEC, the reasons for the halt were 'a lack of current and accurate information about the company concerning, among other things, the control of its stock, its market price, and trading in the stock,'" the complaint continued.
Genovese's actions allowed him "to make huge profits while leaving the company and investors in financial ruin," Stanaford adds.
He seeks compensatory damages for the class, and is represented by Gary Menzer of Menzer & Hill from Boca Raton.