The Securities and Exchange Commission announced that a group of individuals — including five registered brokers — were charged with investment fraud after allegedly attempting to trick investors into buying a specific company’s shares.
The five registered representatives are Richard L. Brown, Gerald J. Cocuzzo, Naveed A. Khan, Maroof Miyana, and Pranav V. Patel.
According to the SEC Order, the brokers allegedly participated in three schemes in an attempt to defraud investors. The first scheme allegedly included the registered brokers being paid cash kickbacks for recommendations and transactions in ForceField Energy Inc. stocks. The customers were not aware of these alleged kickbacks.
In all three schemes, the brokers allegedly tried to conceal their activity by using offshore nominees, disposable (“burner”) phones, and encrypted messaging.
Andrew M. Calamari, Director of the SEC’s New York Regional Office, said,
We allege that these men sold investors on the merits of buying ForceField Energy stock while leaving out the most important detail of all: they were being bribed with money and other benefits behind the scenes to tell them that. The SEC and its law enforcement partners have pieced together the schemes despite the best efforts of the alleged perpetrators to communicate and distribute cash in clandestine ways.
The SEC Order states that the brokers are accused of violating numerous federal securities laws including Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5.
The registered brokers were allegedly paid kickbacks as follows:
- Brown: $30,000 between October 2014 and April 2015
- Cocuzzo: $18,500 between January 2015 and April 2015
- Khan: $49,000 between January 2015 and April 2015
- Miyana: $2,800 between March 2015 and April 2015
- Patel: $2,144 between March 2015 and April 2015
The SEC is ordering all defendants in the matter to disgorge all gains received as a result of the alleged violations. Furthermore, the defendants are being ordered to pay civil monetary penalties.
If you invested money with recommendations from brokers Richard L. Brown, Gerald J. Cocuzzo, Naveed A. Khan, Maroof Miyana, and Pranav V. Patel, call our firm to learn your options. Our securities fraud attorneys at Meyer Wilson are ready to help you. Schedule your free consultation today.