SEC Files Fraud Charges in Shell Market Manipulation Scheme
On Wednesday, the SEC announced fraud charges against two California men and a company behind an alleged scheme to manipulate the stock prices of two shell companies.
The SEC alleges that Troy Flowers and his partner Sean Nevett illegally concealed their control and ownership of Licont Corp. (OTC: LNTP) and Artec Global Media (OTC: ACTL) by using multiple accounts that they controlled in the names of other people and entities. They then allegedly created the false appearance of active trading by making manipulative trades from those accounts to inflate the stock prices. According to the SEC’s complaint, Flowers and Nevett subsequently dumped their own shares into the open market at the expense of innocent investors, who were left with stock that is virtually worthless.
The SEC alleges that Flowers, his company Fruition Inc. (previously called Seacoast Advisors), and Nevett reaped approximately $3.8 million in illegal proceeds from the scheme. According to the SEC’s complaint, IP address information confirms that Flowers and Nevett primarily conducted the manipulative trading from their home offices, and Nevett went so far as to impersonate one of the nominee account holders in his communications with brokers.
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