The U.S. Securities and Exchange Commission has filed a complaint in the Southern District of Texas seeking a permanent injunction and other relief against four defendants, alleging market manipulation through brokers in both the U.S. and Canada.

The SEC has brought a case against Harris Ballow, Christopher Harless, Murry Shepherd and Diane Johnson alleging that they manipulated the market for the common stock of Evans Systems Inc., a Texas-based corporation. The complaint seeks civil penalties and disgorgement against Ballow, and civil penalties against Harless, Shepherd and Johnson.

Specifically, the SEC’s complaint alleges that the defendants established numerous nominee brokerage accounts in the U.S. and Canada using the names of shell corporations controlled by the defendants. After acquiring large positions in Evans Systems stock in the nominee accounts, the complaint alleges, the defendants conducted numerous fraudulent “wash sales” and “matched orders” in the stock between the accounts.

The complaint further alleges that Ballow personally profited from the scheme by transferring approximately US$1.4 million out of the nominee accounts during the course of the manipulation.