(September 18 – 14:30 ET) – The Securities and Exchange Commission has filed a lawsuit charging Jesse Hogan, a 24 year-old resident of Burnaby, B.C., with manipulating over-the-counter stocks online.
The SEC alleges that from July 21 to August 22 Hogan used false Internet postings and e-mails to pump up the stock price of Astrocom Corp., Microtel International Inc., AM Communications Inc., Egan Systems Inc. and RSI Systems Inc., all companies quoted on the NASDAQ OTC Bulletin Board. In just four weeks, Hogan made more than US$40,000 in trading profits from his scheme and was responsible for nearly US$1 million in investor losses.
The commission alleges that with each stock, Hogan first acquired a position, and then sent out spam internet postings and e-mails falsely claiming that a major company would soon acquire the outstanding stock of the firm at a substantial premium over its market price. Hogan then sold his shares into the buying surge created by his postings. The complaint requests injunctive relief, disgorgement of Hogan’s ill-gotten gains and civil penalties.
The U.S. District Court for the Northern District of Illinois issued a temporary restraining order against Hogan, barring him from future violations of the antifraud provisions of the federal securities laws, and also entered an asset freeze. The B.C. Securities Commission froze Hogan’s bank and brokerage accounts in Canada, based on the conduct alleged in the SEC’s complaint.
-IE Staff