MANHATTAN (CN) - Four penny stock traders made $17 million illegally by dumping more than 1 billion shares of microcap companies' stock on the market, the SEC claims in court.
The SEC sued Danny Garber, Michael Manis, Kenneth Yellin, Jordan Feinstein and a dozen companies they ran, most of them LLCs, in Federal Court.
The four men "acquired shares at about 30 to 60 percent off the market price by misrepresenting to the penny stock companies that they intended to hold the shares for investment purposes rather than immediately re-selling them," the SEC said in a statement announcing its lawsuit. "Instead, they immediately sold the shares without registering them by purporting to rely on an exemption for transactions that are in compliance with certain types of state law exemptions. However, no such state law exemptions were applicable to their transactions. To create the appearance that the claimed exemption was valid, they created virtual corporate presences in Minnesota, Texas, and Delaware." Those dozen "virtual corporate presences" are also defendants.
The SEC seeks disgorgement, penalties and injunctions against Garber, 47, of Emerson, N.J.; Manis, 46, of Westbury, N.Y.; Yellin, 41, or Jericho, N.Y.; and Feinstein, 41, of Syosset, N.Y.
Also sued are Azuma Holdings, Azure Trading, Coastal Group Holdings, Greyhawk Equities, Leonidas Group Holdings, The Leonidas Group, Nismic Sales Corp., The OGP Group, Perlinda Enterprises, Slow Train Holdings, and Spartan Group Holdings.
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