The father and son that orchestrated one of the high-profile securities frauds that arose during the “meme stock” frenzy have now been sentenced to prison.
Late last year, the pair — Peter Coker Sr., 82, and Peter Coker, Jr., 56 — pleaded guilty to securities fraud and conspiracy charges in connection with their involvement in a market manipulation scheme that resulted in a company, whose only operating asset was a single New Jersey deli, reaching a market cap of over US$100 million.
Now, U.S. district judge Christine O’Hearn has sentenced Coker Sr. to six months in prison, three years of supervised release, including six months’ home detention and US$500,000 in fines. Coker, Jr. was sentenced to 40 months in prison, three years’ supervised release and US$250,000 in fines.
According to U.S. authorities, the pair, working with a co-conspirator, James Patten, a former broker, secretly took control of a couple of companies that traded on the over-the-counter (OTC) markets, Hometown International Inc. and E-Waste Corp., and then engaged in manipulative trading to inflate the value of their stocks.
Hometown International’s only asset was a deli that generated less than US$40,000 in annual revenues. Yet, during the meme stock craze in 2021, the value of the company’s stock topped US$100 million, as retail investors drove up the stock prices of certain companies without regard for their financial fundamentals.
After the scheme was uncovered, the Cokers and Patten were charged with various criminal offences, and in a parallel action, the U.S. Securities and Exchange Commission (SEC) also filed charges against them.
Patten, who also previously pleaded guilty to the same charges, is still awaiting sentencing.