Biggest Stock Market Criminals
Stock Market Criminals of 2016
Samuel DelPresto: Sam is our 1st stock market criminal, he teamed up with others to secretly obtain control of substantially all available stock in four micro-cap companies and to facilitate coordinated trading that created the appearance of liquidity and market demand for the stocks. After unwitting investors were enticed through promotional campaigns to buy the stock at inflated prices, DelPresto dumped his shares on the market.
Like most penny stock crooks, he thought the SEC would somehow not know what he was up to.
Game over Sammy!
- Shkreli was portfolio manager for the hedge fund MSMB Capital Management LP from October 2009 to March 2014, and also served as portfolio manager of another hedge fund he founded and controlled named MSMB Healthcare LP
- Shkreli is a notorious stock market criminal, he misappropriated about $120,000 from MSMB Capital Management from October 2009 to July 2011 to unlawfully pay for food, clothing, medical expenses, clothing, office rent, and cash withdrawals.
- Shkreli misled investors and prospective investors in MSMB Capital Management about the fund’s size and performance, claiming for example in July 2010 to have “returned +35.77% since inception on 11/1/2009.” In fact, the fund generated losses of about 18 percent.
- In another example, Shkreli falsely stated in December 2010 that the fund had $35 million in assets under management. In fact, the fund had less than $1,000 in assets in its bank and brokerage accounts.
- Shkreli lied to one of MSMB Capital Management’s executing brokers in February 2011 about the fund’s ability to settle a sizeable short sale in a pharmaceutical stock in MSMB Capital Management’s account. This transaction resulted in losses of more than $7 million to the executing broker who had to cover the short position in the open market.
- Shkreli misappropriated $900,000 from MSMB Healthcare in 2013 to settle claims asserted by MSMB Capital Management’s executing broker arising out of the losses suffered in the short selling transaction.
- From September 2013 to March 2014, Shkreli, with assistance from Greebel, fraudulently induced Retrophin to issue stock and make cash payments to certain disgruntled investors in Shkreli’s hedge funds who were threatening legal action. Shkreli and Greebel had investors enter into agreements with Retrophin misleadingly stating the payments were for consulting services when in fact the purpose was the release of potential claims against Shkreli.
Shane Whittle: The Securities and Exchange Commission busted Shane as another dope stock market criminal. SEC recently announced fraud charges against several alleged perpetrators behind a $78 million pump-and-dump scheme involving the stock of Jammin’ Java, a company that operates as Marley Coffee and uses trademarks of late reggae artist Bob Marley to sell coffee products.
The SEC alleges that Jammin Java’s former CEO Shane Whittle orchestrated the scheme with three others who live abroad and operate entities offshore. Whittle utilized a reverse merger to secretly gain control of millions of Jammin Java shares, and he spread the stock to the offshore entities controlled by Wayne Weaver of the UK and Canada, Michael Sun of India, and René Berlinger of Switzerland. The shares were later dumped on the unsuspecting public after the stock price soared following fraudulent promotional campaigns.
Thomas Anthony Guerriero: According to the SEC’s complaint filed in U.S. District Court for the Southern District of Florida:
- Since at least August 2013, Guerriero is a stock market criminal and has operated a classic boiler room scheme under the guise of nominal legitimate businesses through which millions of unregistered shares of stock were sold to investors who were deceived about the stock value and potential profits.
- Guerriero’s salespeople sold Oxford City stock to the public based on leads lists he purchased from third parties. Guerriero crafted scripts for the salespeople, who used aliases to mask their true identities.
- Prospective investors were told they were being offered a limited-time deal to purchase Oxford City shares at a deep discount from the publicly quoted price. Unbeknownst to the victims, the stock price was controlled by Guerriero.
- Guerriero claimed to record phone conversations with potential investors using a “verbal verification system” that supposedly tied the stock “transaction” to their social security number and birthday. In reality, Guerriero and his associates simply pressed any button on their phone to make a sound signaling the fake start of a recording. If investors later refused to pay, Guerriero would threaten them with lawsuits based on their “recorded” verbal commitment.
- Investors were falsely told that Oxford City would pay a 50-cents-per-share dividend within a year. In reality, the company was losing millions of dollars a year and was legally prohibited from paying a dividend.
- Oxford City purportedly had real estate holdings worth approximately $100 million and owned a radio broadcast network that projected profits of almost $20 million. Oxford City actually had assets of approximately $1 million and never owned a radio station – it simply purchased one hour of air time per week.
- Oxford City claimed to own an online university with students already enrolled and projected profits of $495 million for the upcoming five-year period. In reality, there was no such university that ever enrolled a student or had revenue.
- Oxford City purported it would earn more than $238 million over five years from existing and new sports-related facilities. The truth was that Oxford City owned a minority interest in a lower division English soccer club, which generated a small amount of revenue but never turned a profit.
Steve Chen: The Securities and Exchange Commission today announced it has filed fraud charges and obtained asset freezes against the operator of a worldwide pyramid scheme that falsely promised investors would profit from a venture purportedly backed by the company’s massive amber holdings.
California resident Steve Chen and 13 California-based entities, including USFIA Inc., are at the center of the alleged scheme, the SEC said in a complaint filed in federal court in Los Angeles. According to the SEC’s complaint, USFIA and Chen’s other entities have raised more than $32 million from investors in and outside the U.S. since at least April 2013. The SEC’s complaint alleges that Chen and his companies misled investors about a lucrative initial public offering for USFIA that never happened and about claims to own or control amber deposits worth billions of dollars.
The Bottom Line:
These guys lead the pack of stock market criminals for 2016. They all believed they were above the law, and like most criminals in the US they end up behind bars.