Attorney Facilitates Pump-and-Dump Spammers with False Advice
The SEC (Securities and Exchange Commission), on February 8, 2008, announced an enforcement action settled against Kenneth M. Christison, Attorney of Mill Valley, California, for allowing a fraud valuing several million dollars by issuing false legal opinion correspondences for fraudsters to fuel their pump-and-dump spam scam.
65-year-old Christison neither denied nor admitted the allegations. However, he said that he would follow an order that bars him from infringing upon certain laws of security, the SEC disclosed.
The investigation related to two Arizona traders, Lawrence Kaplan and Michael Paloma, who received legal advice from Christison. According to the authorities, traders used illegal means to take 'public seven microcaps', small enterprises giving out low-valued stocks - and sent out massive amount of misleading or false spam mails and faxes to inflate their share price.
They promoted the shares of the companies and netted about $3 Million in illegal profits by distributing millions of bogus spam mails and faxes. The men have pleaded guilty in Alexandria, Virginia federal court to felony charges of committing securities fraud. They are scheduled for sentence in late 2008, said the Commission.
The Commission said that Christison encouraged the scam by providing false legal advice about the stocks.
Director of Division of Enforcement, Linda Chatman Thomsen, for the SEC, said that Christison's support set the conditions for cheaters to run a gross fraud against unsuspecting investors. Marin Independent Journal published this in news on February 7, 2008.
Earlier in September 2007, the Commission had levied and settled legal charges against Kaplan and Paloma in a detailed scheme of market manipulation involving unlawful take up of public seven microcap firms, artificially raising their stock price and then selling off millions of shares at that price.
SEC's case against the spammers and efforts to thwart them led to a three-year long investigation. The US Department of Justice described the scheme as one of the biggest fraud and spamming operations in the United States so far.
The recent incident comes soon after the January 2008 uncovering of a group of 11 spammers, including world's top spammer, for engaging in pump-and-dump scam with Chinese penny stocks.
Related article: Attorney Accused of Unlawfully Accessing E-Mails of County Official
» SPAMfighter News - 18-02-2008