The U.S. Securities and Exchange Commission has brought proceedings against a Florida trader, alleging he used Canadian brokerages to conduct fraudulent wash sales.

The SEC has issued an order instituting public proceedings against Rajiv Vohra of Fort Lauderdale. The commission’s complaint in the district court action alleged that Vohra and others used “wash sales” to create the appearance of active trading in a penny stock.

Vohra and others then arranged to have a false and misleading research report published on a stock-picker Web site, on their own Web site, and through unsolicited mass e-mails. The research report falsely claimed that the issuer of the stock had significantly expanded, that the author of the report was an independent analyst, and that the purported analyst had issued a buy recommendation.

Vohra and others attempted to conceal their scheme by conducting much of their activity through Canadian brokerage accounts and Bahamian companies, the SEC says. The defendants profited approximately US$500,000 from their scheme.

A hearing will be scheduled before an administrative law judge to determine whether the allegations against Vohra are true and, if so, what sanctions may be appropriate.