The Securities and Exchange Commission (SEC) recently released the names of three additional individuals charged in a penny stock manipulation scheme the agency filed last year involving former brokers Matthew A. Bell and Craig L. Josephberg.
The SEC complaint accuses two additional brokers, Michael Morris and Ronald Heineman, helped to facilitate the scheme through their brokerage firm. The third man, attorney Darren Ofsink, is accused of selling unregistered shares.
In a parallel action, criminal charges have been filed against Morris and Ofsink. Morris and Heineman, the owners of Halcyon Cabot Partners, where Josephberg worked, are accused of facilitating Josephberg misconduct. Allegedly, the two owners secretly agreed to buy CodeSmart shares at pre-set prices in a way that facilitated the improper conduct by Josephberg.
The Financial Industry Regulatory Authority (FINRA) expelled Halcyon Cabot Partners in connection with the scheme. In addition, FINRA permanently barred Morris and Heineman from acting as a broker or otherwise associating with firms that sell securities to the public.
According to the SEC press release, “Brokers serve important gatekeeping functions in our markets and deterring market manipulation is among their critical responsibilities,” said Joseph G. Sansone, Co-Chief of the SEC Enforcement Division’s Market Abuse Unit. “We allege that Morris and Heineman didn’t just fail to deter the stock fraud being perpetrated at their brokerage firm, they actively participated in it.”
The foregoing information, which is publicly available here, is being provided by The White Law Group.
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