A U.S. court has found in favour of three defendants in a penny stock fraud case brought by the U.S. Securities and Exchange Commission (SEC) involving a Vancouver-based firm.
The SEC announced Friday that an enforcement action filed in April 2005 against 13 defendants has concluded with a not guilty verdict for the three remaining defendants in the case, after a trial conducted in March-April 2011. The commission previously obtained judgments against the 10 other defendants in the case.
The regulator’s civil injunctive action was filed in the U.S. District Court in Nevada against Exotics.com, Inc., a Nevada corporation based in Vancouver, 12 principal defendants, and one relief defendant. Its complaint alleged that, between at least 1999 and 2002, Exotics.com was the subject of a stock manipulation and accounting fraud.
On Friday, the SEC reported that the court concluded that “the evidence presented at trial was insufficient to prove that [the three remaining defendants] committed the violations alleged in the complaint.”