SEC Files Fraud Charges In MicroCap Shell Scheme
Last week, the SEC filed fraud charges against Niel Nielson for his role in orchestrating a microcap fraud at E-Waste Systems, Inc (EWSI).
According to the SEC, Nielson, who was the CEO, President, and sole director of EWSI, issued frequent false and misleading statements in press releases and public filings to create the false impression that EWSI was expanding quickly across the world and, by mid-2013, earning millions of dollars in revenues each quarter. The reality was that EWSI had no or virtually no operations at any point in time. The vast majority of its agreements with third-party recyclers and other companies had no economic substance, and some of the subsidiaries through which EWSI supposedly was conducting business were dormant or had yet to be formed.
The SEC court document also states that Nielson sold millions of EWSI shares into the market, profiting from the artificially increased share price and volume and causing harm to innocent investors. He failed to disclose any of his sales of EWSI stock, and, from June 2011 onward, disclosed only four of his ten acquisitions of EWSI stock.
Learn more HERE.