A Canadian accountant is being sanctioned in a settlement with the U.S. Securities and Exchange Commission (SEC) for his alleged role in a couple of pump-and-dump schemes.
The SEC filed a settled action against George John Drazenovic, an accountant licensed in British Columbia, alleging that he violated U.S. securities rules with his involvement in penny stock frauds.
Drazenovic consented to the entry of a judgment without admitting or denying the SEC’s allegations.
According to the SEC’s complaint, which was filed in the U.S. district court for the Southern District of New York, between April 2010 and October 2019, Drazenovic aided a pair of penny stock fraud schemes by acting as a finder of mineral extraction or exploration rights, “which then served as the purported marquee assets of at least 10 different penny stock issuers and were central to the pump-and-dump frauds.”
“During this period, Drazenovic recklessly furthered at least two distinct penny stock fraud rings — one led by Ronald Bauer and the other having Daniel Ferris among its principals — that engaged in pump-and-dump frauds which ultimately cost retail investors millions of dollars in losses,” the SEC’s complaint said.
Bauer, who has previously been sanctioned for penny stock fraud, is facing SEC civil action, and was sentenced to 20 months in prison in a parallel criminal case involving several other alleged pump-and-dump schemes. Ferris is a co-defendant in those pending cases too.
The allegations in those cases have not been proven.
Under the proposed final judgments, which are subject to court approval, Drazenovic is ordered to pay over US$600,000 in disgorgement, penalties, and interest. He is also banned from participating in penny stock offerings, and from serving as the director or officer of a public company for three years.