(July 18 – 18:30 ET) – The Securities and Exchange Commission has filed charges against an Internet barker that used a Canadian stock in his scheme.
The SEC filed a civil complaint against Jason Chester and JMAX Online Communications Inc. of Tampa, Fla., alleging that they published a false Internet stock recommendation on Winchester Mining Corp., an OTC Bulletin Board stock. The false recommendation claimed to have been issued by Chase Manhattan Bank.
Winchester is a Vancouver-based firm that has been listed on the wild and woolly OTC Bulletin Board for some time. It had purportedly been transforming itself into an online casino. Although on July 14 the firm announced that it has changed its name to PNW Capital Inc. It still trades OTC under a different symbol. In its latest incarnation the firm is developing a couple of online shopping malls.
Chester and JMAX have settled with the SEC without admitting or denying any of the allegations in the SEC’s complaint. They consented to permanent injunctive relief, a US$20,000 civil penalty, disgorgement of US$1,425, plus prejudgment interest.
The SEC alleges that Chester and JMAX fraudulently misrepresented that Chase had placed a “strong buy recommendation” on Winchester’s stock, predicting it would run from 17ยข to $5, in an investment review and press release that they published on the Internet. That day, Winchester became the fifth most actively traded stock on the Bulletin Board.
It also alleges that Chester and JMAX violated the antifraud provisions of federal securities laws by “scalping” Winchester stock — as they were pushing the stock online, they also sold 250,000 shares they received for touting Winchester.
-IE Staff