Securities Law Prof Blog

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

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Tuesday, February 1, 2011

SEC Charges Operators of $33 Million International Microcap Stock Scheme with Fraud

The SEC brought fraud charges against the operators of a $33 million international microcap stock scheme involving the stocks of eight small U.S. companies headquartered in the People's Republic of China, Canada, and Israel.  The SEC charged three companies and eight individuals with engaging in unlawful spam e-mail campaigns to pump and dump securities of microcap companies. The SEC alleges that each scheme was primarily organized and devised by one or all of the following:

Francis A. Tribble, who is a U.S. citizen and former stock promoter
How Wai Hui (a.k.a. John Hui), who is a dual citizen of Hong Kong and Canada and the former CEO of China World Trade Corp.
Kwong-Chung Chan (a.k.a. Bernard Chan), who is a citizen and resident of Hong Kong and the former CFO of China World Trade Corp.
Gregg M.S. Berger, who is a stockbroker from Yonkers, N.Y.

In a parallel criminal proceeding, the Department of Justice today unsealed an indictment against Berger, charging him with one count of conspiracy to commit securities fraud and wire fraud. Previously, in related criminal actions, Hui and Tribble pleaded guilty to conspiracy to commit wire fraud, mail fraud and to violate the CAN-SPAM Act, as well as to committing wire fraud and engaging in money laundering for their roles in the scheme to artificially inflate the prices of the securities of several companies, including China World Trade. Hui and Tribble were each sentenced to 51 months in prison for their actions.

http://lawprofessors.typepad.com/securities/2011/02/sec-charges-operators-of-33-million-international-microcap-stock-scheme-with-fraud.html

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