The Securities and Exchange Commission today announced fraud charges against five individuals for allegedly operating a call center in Medellin, Colombia, which used high pressure sales tactics and made false and misleading statements to retail investors to convince them to buy the stocks of small companies trading in the U.S. markets.
According to the SEC’s complaint, filed on March 14, 2022, U.S. citizen Chester Alvarez, Canadian citizens Francis Biller, Raymond Dove, and Troy Gran-Brooks, and Dutch citizen Justin Plaizier operated call centers, set up as phony investment management firms, with fake names, websites, and phone numbers. The SEC’s complaint alleges that, using the false personas, the defendants orchestrated a pump-and-dump scheme and made false and misleading statements when they promoted the stock of at least 18 issuers, and that they generated more than $58 million in trading from this scheme. The complaint also alleges that the defendants were paid approximately $10 million for promoting thinly traded stocks, which they misled investors to believe had high prospects for success.
"These scam artists went to great lengths – using bogus companies, aliases, and spoofing their phone numbers – to defraud and mislead investors into a pump-and-dump scheme," said Paul Levenson, Director of the SEC’s Boston Regional Office. "We urge investors to read the investor education materials about fraud in the ‘penny stock’ market, which are available at Investor.gov."
The SEC’s complaint, filed in the U.S. District Court for the Eastern District of New York, charges all defendants with violations of antifraud provisions of the securities laws and charges Alvarez with violating market manipulation provisions of the securities laws. It also seeks injunctive relief, disgorgement plus prejudgment interest, civil penalties, and a prohibition on participating in any offerings of penny stocks by all defendants.
The SEC’s continuing case is being handled by Trevor Donelan, Kathleen Shields, Jonathan Allen, and Amy Gwiazda of the SEC’s Boston Regional Office with the assistance of Marlee Miller and Owen Granke of the Office of International Affairs and Alex Lefferts in the Office of Investigative and Market Analytics. The SEC appreciates the assistance in this matter of Rebecca Israel of the SEC’s Office of Market Intelligence, the Financial Industry Regulatory Authority (FINRA), the Argentinian Comisión Nacional de Valores, the British Columbia Securities Commission, the Royal Canadian Mounted Police, the Hong Kong Securities and Futures Commission, the Malta Financial Services Authority, the Mauritius Financial Services Commission, the Mexican Comisión Nacional Bancaria y de Valores, the Panamanian Superintendencia del Mercado de Valores, the Monetary Authority of Singapore, the Dubai Financial Services Authority, the UAE Securities and Commodities Authority, the Superintendencia Financiera de Colombia, the Colombian Office the Attorney General, the Swiss Financial Market Supervisory Authority, and the Switzerland Federal Office of Justice.
