Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Thursday, February 12, 2009

SEC Charges Canadian with Manipulating Stocks of Four Companies

The SEC announced that today it charged George Georgiou, of Toronto, Ontario, with manipulating the market in four separate microcap stocks — Avicena Group, Inc., Neutron Enterprises, Inc., Hydrogen Hybrid Technologies, Inc., and Northern Ethanol, Inc.  The Commission's action, filed in federal district court in Philadelphia, alleges that, from 2004 through September 2008, Georgiou, who controlled the publicly-traded stock of each company, manipulated the market in each stock through the use of many nominee accounts that he either directly or indirectly controlled at offshore broker-dealers and banks and the use of manipulative techniques, including matched orders and wash sales. Ultimately, Georgiou realized at least $20.9 million in ill-gotten gains from his manipulation schemes.

In addition to the enforcement action, the Commission today entered an order suspending trading in the securities of the four manipulated stocks for a ten day period commencing 9:30 a.m. February 12, 2009. The U. S. Attorney for the Eastern District of Pennsylvania today separately announced criminal charges against Georgiou involving the same conduct.

The Commission's complaint alleges that Avicena Group is headquartered in Palo Alto, California, and that the other three companies are headquartered in Canada. 

The complaint seeks a permanent injunction, disgorgement of ill-gotten gains, together with prejudgment interest, civil penalties, and a penny stock bar against Georgiou.

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