Attorney and Businessman Barred from Penny Stock Offerings for Engaging in a Microcap Pump-And-Dump Scheme
Yesterday, two South Florida men agreed to lifetime bars from participating in penny stock offerings to settle charges brought by the Securities and Exchange Commission alleging that they facilitated a pump-and-dump scheme involving shares of a Sunrise, Florida company that purported to be in the beauty products business.
The SEC alleges that attorney Mark E. Fisher of Boca Raton, Florida and businessman Joseph F. Capuozzo of Sunrise, Florida received millions of shares of Valentine Beauty Inc. in connection with a pump-and-dump scheme orchestrated by Eddy U. Marin, who controlled Valentine. Earlier this year, the SEC charged Marin and a stock promoter with fraud for their roles in the scheme. The SEC alleges that Fisher and Capuozzo coordinated with Marin and others to launch a marketing campaign touting Valentine’s purported operations. Once the promotional campaign increased the liquidity and price of Valentine’s stock, Fisher and Capuozzo sold a significant portion of their shares, collectively reaping more than $150,000 in stock sale proceeds.
In a parallel action, the U.S. Attorney’s Office for the Southern District of Florida today announced criminal charges against Fisher and Capuozzo.
The SEC’s complaint, filed in federal court in Miami, charges Fisher and Capuozzo with violating the registration provisions of Sections 5(a) and (c) of the Securities Act of 1933 and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder. The complaint also charges Fisher with violating antifraud Rule 10b-5(b) of the Exchange Act. Fisher and Capuozzo have agreed to settle the SEC’s charges and be barred from the penny stock industry. Capuozzo also agreed to be barred from serving as an officer or director of a public company. The settlement with the SEC, which is subject to court approval, also permanently enjoins Fisher and Capuozzo from violating the charged provisions of the federal securities laws and provides that the court will decide the amounts of disgorgement, interest, and civil penalties at a later date.
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