South Florida – Penny Stock Fraud Hotbed

Penny Stock Fraud Litigation and FINRA Arbitration Attorney, Russell L. Forkey, Esq.

June, 20132:

SEC v. Yan K. Skwara and US Farms, Inc., Civil Action No. 0:12-cv-61078-JAL (U.S. District Court for the Southern District of Florida)

SEC v. Douglas D. Hague and Clean Coal Technologies, Inc., Civil Action No. 0:12-cv-61076-WJZ (U.S. District Court for the Southern District of Florida)

SEC v. Joseph J. Repko, Michael M. Cimino, and Sure Trace Security Corp., Civil Action No. 0:12-cv-61079-KMW (U.S. District Court for the Southern District of Florida)

SEC v. Ryan F. Coblin and Delivery Technology Solutions, Inc., Civil Action No. 0:12-cv-80599-KLR (U.S. District Court for the Southern District of Florida)

SEC v. Robert L. Cotton and Cotton & Western Mining, Inc., Civil Action No. 0:12-cv-61072-WJZ (U.S. District Court for the Southern District of Florida)

SEC v. Harold Steven Bonenberger and Angel Acquisition Corp. n/k/a Biogeron, Inc., Civil Action No. 0:12-cv-61075-WPD (U.S. District Court for the Southern District of Florida)

SEC v. Matthew A. Connor, Civil Action No. 0:12-cv-61081-RNS (U.S. District Court for the Southern District of Florida)

SEC v. Kevin P. Brennan, Donald G. Huggins, and Marc S. Page and Optimized Transportation Management, Inc., Civil Action No. 0:12-cv-61074-JIC (U.S. District Court for the Southern District of Florida)

SEC v. Scott A. Haire and Wound Management Technologies, Inc., Civil Action No. 0:12-cv-61077-CMA (U.S. District Court for the Southern District of Florida)

The Securities and Exchange Commission recently charged several CEOs and their companies, and three penny stock promoters with securities fraud for their roles in various illicit kickback and market manipulation schemes involving microcap stocks. The defendants reside or are based in South Florida, California, Texas, Pennsylvania, New York, Virginia, and Nevada.

The SEC worked closely with the U.S. Attorney’s Office for the Southern District of Florida and the Federal Bureau of Investigation as the separate schemes were uncovered. The U.S. Attorney’s Office also announced criminal charges against the same individuals facing SEC civil charges.

According to complaints the SEC filed in the U.S. District Court for the Southern District of Florida, defendants Yan K. Skwara, Douglas D. Hague, Joseph J. Repko, Michael M. Cimino, Ryan F. Coblin, US Farms, Inc., Clean Coal Technologies, Inc., Sure Trace Security Corp., and Delivery Technology Solutions, Inc. engaged in schemes involving the payment of undisclosed kickbacks to a pension fund manager in exchange for the fund’s purchase of restricted shares of stock in the various microcap companies.

According to additional complaints also filed in the Southern District of Florida, defendants Robert L. Cotton, Harold Steven Bonenberger, Matthew A. Connor, Kevin P. Brennan, Donald G. Huggins, Marc S. Page, Cotton & Western Mining, Inc., Angel Acquisition Corp. n/k/a Biogeron, Inc., and Optimized Transportation Management, Inc. engaged in schemes involving an undisclosed bribe that was to be paid to a stock broker who agreed to purchase the microcap companies’ stock in the open market for his customers’ discretionary accounts. In the complaint against defendants Scott A. Haire and Wound Management Technologies, Inc., the SEC alleges that the defendants engaged in schemes involving both an undisclosed kickback and bribe.

The SEC alleges that the defendants in the schemes involving undisclosed kickbacks understood they needed to disguise the kickbacks as payments to phony consulting companies, which they knew would perform no actual work. They also knew the fund manager owed a fiduciary duty to the fund. In the schemes involving the undisclosed bribes, the SEC alleges that the defendants knew their illegal activities were meant to artificially inflate the companies’ stock volume and prices.

The SEC’s complaints allege the defendants violated Section 17(a)(1) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5(a) and/or 10b-5(c) thereunder. The SEC is seeking permanent injunctions, disgorgement plus prejudgment interest, and financial penalties against all the defendants; penny stock bars against all the individual defendants, and officer-and-director bars against defendants Skwara, Hague, Cimino, Bonenberger, Brennan, and Haire.