Pump and Dump Made|Millions, SEC Claims | Courthouse News Service
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Pump and Dump Made|Millions, SEC Claims

BOSTON (CN) - A top officer in Spencer Pharmaceutical, a "purported pharmaceutical company," made $5.8 million in a pump and dump scheme, then took it on the lam, the SEC claims in court.

The SEC sued Spencer Pharmaceutical, Jean-Francois Amyot and four other defendants, in Federal Court.

It accuses Amyot, 40, of running the scheme.

Amyot, 40, of Quebec, "may recently have moved to the Bahamas," the SEC says in its complaint.

It also sued Maximilien Arella, Ian Morrice, and two Canadian companies Amyot controls: IAB Media and Hilbroy.

"The scheme was orchestrated by Amyot, who was an officer of Spencer until November 2009 and then continued to exercise control over the affairs of the company," the SEC says in the complaint. "Amyot was assisted by Arella and Morrice, who became officers and directors of Spencer in November 2009, and together they effected the 'pump' of Spencer's stock price by disseminating false information about Spencer through two public relations companies that Amyor controlled (IAB and Hilbroy)."

Arella, 56, live in Montreal; Morrice, 52, in Ottawa, according to the complaint.

The defendants ran a bogus campaign in November 2010 claiming that a Middle Eastern company wanted to buy Spencer for $245 million, or 97 cents a share, more than twice the stock price at the time, the SEC says. The stock price then jumped from 25 cents to 60 cents in two days, according to the complaint.

"The proposed buyout offer was pure fiction, but Amyot's profits from dumping Spencer stock were very real," the SEC says. It claims he sold 36 million shares of the company "for gross proceeds of more than $5.8 million. Amyot and Arella also orchestrated the deposit of 12 million Spencer shares into an account controlled by Amyot through a series of transfers done to evade restrictions and securities registration requirements."

The SEC seeks disgorgement, penalties and injunctions.

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