The U.S. Securities and Exchange Commission on Friday announced securities fraud charges against a U.K.-based broker-dealer, Beaufort Securities Ltd., and its investment manager, Peter Kyriacou, in connection with manipulative trading in the securities of HD View 360 Inc., a U.S.-based microcap issuer.
The SEC also announced charges against HD View’s CEO, another individual, and three entities they control for manipulating HD View’s securities as well as the securities of another microcap issuer, West Coast Ventures Group Corp. The SEC further announced the institution of an order suspending trading in the securities of HD View.
The charges include conspiracy to commit securities fraud and money laundering conspiracy. The allegations have not been proven and defendants in the case are presumed innocent.
The SEC further announced the institution of an order suspending trading in the securities of HD View.
“The scheme involved an undercover FBI agent who described his business as manipulating U.S. stocks through pump-and-dump schemes. Kyriacou and the agent discussed depositing large blocks of microcap stock in Beaufort accounts, driving up the price of the stock through promotions, manipulating the stock’s price and volume through matched trades, and then selling the shares for a large profit,” the SEC says in a news release.
“Beaufort Securities facilitated at least ten ‘pump and dump’ schemes involving U.S. publicly traded stocks, generating over US$50 million in proceeds for its clients,” the U.S. Department of Justice, says in a statement, adding that the proceeds of illicit trading was laundered through the art world and complex network of offshore firms.
“As alleged in the indictment, the defendants engaged in an elaborate multi-year scheme to defraud the investing public of millions of dollars through deceit and manipulative stock trading, and then worked to launder the fraudulent proceeds through off-shore bank accounts and the art world, including the proposed purchase of a Picasso painting,” said Richard Donoghue, U.S. attorney for the Eastern District of New York, in a statement.
Te Alberta Securities Commission, the Ontario Securities Commission, the U.K. Financial Conduct Authority, and the U.S. Financial Industry Regulatory Authority contributed to the SEC’s investigation, which is continuing. The SEC’s complaint indicates that some of the manipulative trades were placed with Canadian brokers.
Also on Friday, the FCA announced that it has put Beaufort Securities and a related firm, Beaufort Asset Clearing Services Ltd., into insolvency and appointed administrators to oversee its assets. “This action is also necessary due to concerns that the firms may be involved in financial crime,” it says in a statement.