(June 14 – 19:00 ET) – The Securities and Exchange Commission and U.S. justice officials have sprung a trap against a massive fraud involving the New York mob infiltrating the securities business.
The SEC is suing 63 individuals and firms in five enforcement actions, alleging “pump and dump” manipulation schemes, private placement fraud and investment advisor pay-to-play violations. The commission says that those involved earned millions of dollars in illicit profits.
The U.S. Attorney for the Southern District of New York and the FBI filed simultaneous criminal complaints against more than 100 defendants, including 11 alleged members of organized crime, with representation from each of New York’s legendary “five families”. In addition to the fraud charges they also face accusations of extortion, money laundering, bribery, witness tampering, and murder solicitation.
A New York-based investment firm, DMN Capital Investments, is alleged to be at the centre of the fraud with police alleging that it has been infiltrated by the mob. “It was an investment bank to the crooked and corrupt,” said U.S. attorney Mary Jo White.
Richard Walker, the SEC’s director of enforcement, said, “The securities fraud involved in today’s actions is among the most egregious witnessed in recent years. These manipulations of numerous stocks were designed for the sole purpose of stealing investors’ hard-earned dollars. The prosecutions announced today rid the vital market for low-priced securities of unscrupulous operators and reaffirm regulators’ commitment to keeping this market safe and fair.”