DALLAS (CN) - A Dallas-based consulting firm defrauded investors in a pump and dump scheme, the SEC says in Federal Court. Robert Feeback, 50, of Plano, half-owner of Summit Advisory Partners, is accused of working with three stock promoters to hype the unregistered offerings of penny stock companies Beverage Creations, Alchemy Creative and My Vintage Baby.
Feeback and Summit are the only defendants in this case. The SEC says Feeback worked with stock promoters Ryan Reynolds, Jason Wynn and Carlton Fleming, who bought millions of shares for pennies apiece and hyped the companies through mailers, the Internet and press releases.
The SEC says the promoters had their families and friends buy and sell shares to create the appearance of market demand, then they resold millions of shares at inflated prices.
Feeback and Summit introduced the issuers to financiers to provide funding and purchase the shares, assisted the issuers in obtaining legal services and documents and steered the public relations effort to promote the company when public trading began, according to the complaint.
"The scheme worked," the SEC said. "In the three weeks after its Jan. 30, 2008 debut - even as the promoters dumped their shares on the public - BCI's stock price more than doubled, from an intraday low of $.55 per share on Jan. 30 to its Feb. 21 close at $1.25 per share.
"Likewise, in the first five weeks of trading, Alchemy's stock price soared almost 75 percent, from an intraday low of $1.90 per share on Dec. 5, 2007 to an intraday high of $3.32 per share on Jan. 11, 2008. My Vintage Baby's stock price experienced even greater gains over its first five weeks of trading, rising from an intraday low of $.40 per share to an intraday high of $2.88 per share."
The SEC says the promoters sold their shares to the public for a profit of more than $20 million. It wants Feeback and Summit to disgorge ill-gotten gains.