(CN) – A stock broker manipulated the market by sending bogus press releases about phony buyout offers from major companies such as Google, Microsoft and Google, the SEC claims in San Jose Federal Court. It say Lambros Ballas was “wildly effective” in his scam, which drove up the price of one company’s shares by 80 percent “within a few hours of the issuance of the phony press release.”
Ballas, 34, of Merrick, N.Y., posed as an investor and posted the phony stock tips in Internet message boards, the SEC says. Ballas is or was an independent contractor with (nonparty) Global Arena Capital Corp., according to the federal complaint.
According to the SEC:
Ballas drove up the price of Discovery Labs stock by 46 percent in one day – from Sept. 29-30 – with a phony press release about an FDA approval. He bought shares at $1.12 on Sept. 29 and sold them at $1.51 to $1.61 the next day.
He drove up the price of IMAX stock by issuing a phony press release on Sept. 30 that Disney was buying it.
He bought 5,000 share of Local.com at $5.33 on Oct. 1, then drove up the price to $9.65 by announcing that Microsoft was buying it, giving Ballas a “paper profit” of $21,600.
“Ballas caused significant market disruption with his hoaxes, forcing companies to scramble to correct the public record,” the SEC’s regional director said in a statement.
The SEC seeks an injunction and fines.