SEC Charges Former Oxford, Mississippi Investment Advisor with Securities
Fraud Over Press Releases Designed to Artificially Inflate Stock
Last Friday, the SEC charged Anthony K. Welch, a former investment advisor
and former resident of Oxford, Mississippi, with securities fraud for
issuing a series of false and misleading press releases that allegedly
were designed to artificially inflate stock prices.
Welch served as the Chairman and CEO of eHydrogen from January 2007 through
August 2010, and the Chairman and CEO of ChromoCure from June 2009 through
at least August 2010. The SEC alleges that prior to Welch’s assumption
of control over the companies, they each had functioned largely as “shell
corporations” with frequently changing names. Then, as now, they
allegedly had little to no revenue or actual business operations.
Despite the allegedly defunct state of the companies, however, the SEC
alleges that Welch distributed a series of press releases and other public
disclosures that contained intentionally false and misleading information
about the companies’ revenues and technological acquirements in
order to increase stock purchases.
“From approximately March through October 2010, Welch spearheaded
an internet based promotional campaign for eHydrogen and ChomoCure, pumping
out a high volume of near-weekly press releases containing a wide degree
of, at best, questionable assertions regarding future business operations,”
alleged the Complaint. “In multiple instances such statements were
intentionally false and misleading, distributed by Welch for no purpose
other than to incite trading activity and artificially inflate the price
and trading volume of eHydrogen and ChomoCure.”
Another company formerly controlled by Welch (Maxim Advisors, LLC) also
was sanctioned for using false and misleading promotional material while
under his control. The Financial Industry Regulatory Authority revoked
the firm’s registration in 2004.
Welch now lives outside of the United States. The SEC is seeking a variety
of injunctions and bars against him, as well as disgorgement and civil
penalties. For more information, access the full SEC Complaint