MANHATTAN (CN) – After a three-week jury trial, the CEO of Smart Online, his brother and a stockbroker were found guilty of all nine charges of manipulating the company’s stock price through bribery. CEO Dennis Michael Nouri bribed brokers, including co-defendant Anthony Martin, to sell the stock at inflated prices from May 2005 to July. Nouri’s brother, Reza Eric Nouri, who once worked for the company, participated in the conspiracy.
In conversations recorded after the SEC suspended trading in the company’s shares on the NASDAQ, Nouri “described how to lie to investigators to cover up the scheme and how to conceal the nature of the illegal kickbacks to brokers,” prosecutors said.
Another time, Nouri took the cell phone of a participating broker, deleted his own number from it, and gave him a new one to use to call him.
The Nouris and Martin were each found guilty of one count of conspiracy to commit securities fraud, wire fraud, and commercial bribery (each carrying a maximum 5-year sentence), and one count of securities fraud (with a maximum sentence of 20 years).
The Nouri brothers also were found guilty of three additional counts of wire fraud (20 years maximum per count) and one count of commercial bribery (a 5-year maximum term).
All three will be sentenced on Oct. 6.