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Broker Hyped Penny Stocks, SEC Claims

WEST PALM BEACH, Fla. (CN) - The Securities and Exchange Commission has accused Florida-based securities broker Anthony Fareri of bilking investors for more than $4.7 million by using their money to buy shares in two shell companies in order to manipulate the companies' stock.

Anthony Fareri, through Fareri Financial Services dba Amerifinancial, allegedly funneled money to American Financial Holdings and Secure Solutions Holdings and received more than $1 million in "secret kickbacks."

Fareri and Paul Harary, a private investor, created an artificial market for the two stocks by controlling the supply and creating the illusion of demand, the SEC claims.

"As a result, FFS customers were left with worthless shares of the two shell companies," the federal lawsuit claims.

The SEC charges Fareri with securities fraud and seeks an order requiring him to disgorge his profits. The SEC also wants an injunction barring him from participating in an offering of penny stock.

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