MANHATTAN (CN) - Three men made $10 million from pump-and-dump schemes in five penny stocks, the SEC claims in court.
The SEC sued Anthony J. Thompson Jr., Jay Fung and Eric Van Nguyen on Monday in Federal Court.
The SEC claims they pumped the stocks through misleading electronic newsletters from November 2009 to September 2010, then dumped their own shares, leaving investors holding the empty bag.
The defendants are accused of pumping the stock of (nonparties) Blast Applications, Smart Holdings, Blue Gem Enterprise, Lyric Jeans, and Mass Hysteria Entertainment Co.
Two relief defendants - John Babikian, and Thompson's wife Kendall Thompson - also profited, Babikian with more than $1 million and Kendall Thompson with $200,000, the SEC says in the complaint.
The five people are the only defendants in this lawsuit.
Thompson, 38, of Bethesda, Md., controlled OTC Solutions, which distributed at least six electronic newsletters promoting penny stocks.
Fung, 40, of Delray Beach, Fla., is a penny stock promoter who controlled Pudong LLC, a defunct company based in Boca Raton that distributed electronic penny stock promotion newsletters, including PennyPic.com.
Van Nguyen, whereabouts unknown but formerly of Quebec, controlled the defunct penny stock promotion site Golden Dragon Media, formerly of Henderson, Nev.
Babikian, formerly of Montreal, is believed to be living "abroad." His site was called AwesomePennyStocks.com.
It's not the first time around for any of the three primary defendants, the SEC says.
A federal judge in Manhattan in July ordered Babikian to pay $3.7 million in disgorgement, interest and penalties for using his company AwesomePennyStocks to "scalp" traders in another pump-and-dump scheme.
Thompson and Fung were named in a May 2012 SEC federal complaint in another pump-and-dump scheme, and were ordered to pay more than $1 million, the SEC said.
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