Penny Stock Fraud and Misrepresentation Florida FINRA Arbitration and Litigation Attorney

Securities and Exchange Commission v. Jerry S. Williams, Monk’s Den, LLC, and First In Awareness, LLC, 3:12-cv-01068 (District of Connecticut, Complaint filed July 20, 2012)

July, 2012

SEC CHARGES STOCK PROMOTER IN INTERNET-BASED SCALPING SCHEME.

The Securities and Exchange Commission recently announced that on July 20, 2012, it filed a civil fraud action against former Connecticut resident Jerry S. Williams, a stock promoter, and two companies that he controlled, Monk’s Den, LLC and First In Awareness, LLC. The Commission charged Williams with running a scalping scheme from which he made over $2.4 million. Scalping is a type of fraud in which the owner of shares of a security recommends that security for investment and then immediately sells it at a profit upon the rise in market price which follows the recommendation.

The Commission’s Complaint alleges that from at least early 2009 through at least the end of 2010, Williams recommended two stocks, Cascadia Investments, Inc. and Green Oasis Environmental, Inc., to a large group of potential investors who followed his trading recommendations and strategies. According to the Complaint, Williams, who was known to his followers as “Monk,” used his internet-based message board (called “Monk’s Den”), in-person seminars (called “Monkinars”), and other means to encourage people to buy, hold, and accumulate Cascadia and Green Oasis stock. In particular, the Complaint alleges that Williams told potential investors that by buying up the outstanding shares, or float, of these companies, they could collectively trigger a “short squeeze” that would allow them to sell their stock to “market makers” that had shorted the stock. The Commission’s Complaint alleges that Williams falsely stated that he had previously used this strategy to make himself and others enormous profits. The Complaint alleges that in fact, unknown to potential investors, Williams had been hired by Cascadia and Green Oasis to promote their stock and had been compensated with millions of free and discounted shares of these stocks. According to the Complaint, Williams secretly sold millions of Cascadia and Green Oasis shares at the same time he was encouraging potential investors to buy, hold and accumulate these stocks. Through this scheme, the Complaint alleges, Williams made over $2.4 million.

The Commission’s Complaint charged Williams, First In Awareness, LLC and Monk’s Den, LLC with violating Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a), (b), and (c) thereunder. The Commission also charged Williams with violating Sections 17(a)(1), 17(a)(2), 17(a)(3) and 17(b) of the Securities Act of 1933 and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The Commission is seeking permanent injunctions, disgorgement, prejudgment interest, and civil penalties against each defendant and, as to Williams only, a penny stock bar.