FBI Arrests “Mailman” for Penny Stock Scalping Scheme
On Friday, the SEC charged a penny stock promoter based in Florida with defrauding investors in a pair of gold mining stocks by secretly amassing shares before touting the companies publicly. He allegedly sold the bulk of his stock and reaped more than $1.1 million in illicit profits after his promotions caused the share prices and trading volumes to skyrocket.
The SEC’s complaint alleges that Brian Robert Sodi, known in penny stock circles as “Mailman” for his pervasive participation in direct-mailed penny stock promotions, committed a fraud known as scalping. He allegedly disseminated promotions recommending the purchase of the stocks in Southern USA Resources Inc. and Goff Corporation (OTCPINK: GOFF) without disclosing he owned shares and planned to sell them through a foreign bank. Sodi also allegedly hid from investors that he was being paid in stock for one of these promotions. According to the SEC’s complaint, Sodi proceeded to unload hundreds of thousands of his own shares to the detriment of other investors who bought in to the hype.
“Everyday investors are the unwitting targets of scalping schemes, and we’re here to fight back for them,” said Melissa Hodgman, Associate Director in the SEC’s Enforcement Division. “As alleged in our complaint, Sodi deviously used a foreign bank account not in his name in an effort to go undetected, but he failed to hide his illicit trading from us.”
Criminal charges were unsealed yesterday in a parallel action filed by the U.S. Attorney’s Office for the Northern District of Alabama.
The SEC’s complaint filed February 26 charges Sodi and two of his publishing houses, Capital Financial Media LLC and List Data Solutions LLC, with violating Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 and Sections 17(a) and (b) of the Securities Act of 1933. The complaint also charges Sodi with violating Section 13(d) of the Exchange Act and Rule 13d-1 as well as Sections 5(a) and (c) of the Securities Act. Among other things, the complaint seeks an accounting of all of Sodi’s and his entities’ sales of all U.S. penny stocks that Sodi’s platform promoted within the last five years.
The FBI arrested Sodi for securities and mail fraud charges related to the scheme on Thursday of last week.
Learn more HERE.