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Univ. of Toledo College of Law

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Wednesday, March 18, 2009

Texas Men Settle Penny Stock Fraud Charges

Two Texas men, Darrel T. Uselton and Jack E. Uselton, who perpetrated a massive e-mail spam campaign to drive up the demand for low value stocks they owned, will pay nearly $4 million in penalties and fines and will no longer be able to trade penny stocks under an agreement reached with the Securities and Exchange Commission.  According to the SEC initial complaint, the Useltons generated proceeds of more than $4 million by obtaining stock from at least 13 penny stock companies from May, 2005 through December, 2006 and then, according to the SEC, selling those shares into an artificially active, and often-times rising, market that they created through manipulative trading, spam e-mails, direct mailers, and internet-based promotional activities.

Darrel Uselton and Jack Uselton, without admitting or denying the allegations, settled the action by consenting to entry of a court order that: (i) permanently bars them from Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder; and (ii) prohibits them from participating in an offering of penny stock pursuant to Section 21(d)(6) of the Exchange Act.

In addition, Darrel Uselton consented to entry of a court order that orders him to pay disgorgement and prejudgment interest in the amount of $2,838,866.72, which will be deemed satisfied upon entry of an order requiring him to pay that amount in restitution to the State of Texas. It also requires him to pay a civil monetary penalty of $1 million.

http://lawprofessors.typepad.com/securities/2009/03/texas-men-settle-penny-stock-fraud-charges.html

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Comments

great list! To add to this, if you are the blogger for your company, it seperates you from others around you and gives you visibility within a large organization.

Posted by: Penny Stocks | May 1, 2009 9:38:40 PM

Hi, Great post! I felt great reading your blog post. I’m working with my friend in a small internet marketing business as a web developer. When I’m free I go around for some IT info.

Posted by: Penny Stocks | May 13, 2009 10:08:16 PM

Every one knows that penny stock investing is a risky job. Still many people run after it. The reason is that it gives a chance to make money in a short period of time. An important tip about trading stock is: Be very tolerant and constantly try to buy at the proffer price.

Posted by: Penny Stock Investing | Jul 31, 2009 11:08:28 PM

Penny stocks can be highly profitable but never dump all of your eggs into one basket, and beware people "pumping and dumping" ... like through eMail or any other medium.

Posted by: Penny Stocks to Buy | Oct 4, 2009 9:45:42 PM

This is really bad. The penny stock stands for any stock that has very low value, highly speculative stock.

Posted by: Penny Stocks | Nov 4, 2009 2:54:05 AM

Yes, now on internet there so fraud marketing is going, the government should penalize them.

Posted by: Penny Stock Alerts | Nov 10, 2009 10:38:08 PM

I agree that penny stocks are easy to manipulate because the market shares are small.

Posted by: Penny Stock Investor | Nov 19, 2009 10:40:00 PM

Hi,

Posted nicely. It will be appreciated. It know more vigorous thing visit at penny stocks

Posted by: Penny Stocks | Nov 24, 2009 2:19:47 AM

Thanks you for your wonderful and nice blog.

Posted by: Penny Stocks | Dec 17, 2009 3:13:32 AM

It is really posted well and it is appreciative. Thanks

Posted by: Penny Stocks | Dec 17, 2009 3:17:33 AM

They should be penalized by the government.

Posted by: Penny Stock Newsletter | Dec 17, 2009 8:07:32 PM

this is really not a good practice for the industry...

Posted by: henry@stock chat | Mar 18, 2010 4:25:27 AM

every one doesn't know penny stock investing is very risky and this type of frauds are common in this industry.This is not good practice for stock industry.

James William
beststock.ca

Posted by: best penny stocks | Aug 20, 2010 11:43:52 AM

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