Securities Law Prof Blog

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

Friday, February 18, 2011

SEC Charges Seven with Global Warming Pump & Dump Scheme

The SEC today charged a group of seven individuals who perpetrated a fraudulent pump-and-dump scheme in the stock of a sham company that purported to provide products and services to fight global warming.  The SEC alleges that the group included stock promoters, traders, and a lawyer who wrote a fraudulent opinion letter. The scheme resulted in more than $7 million in illicit profits from sales of stock in CO2 Tech Ltd. at artificially inflated prices. Despite touting impressive business relationships and anti-global warming technology innovations, CO2 Tech did not have any significant assets or operations. The company was purportedly based in London, and its stock prices were quoted in the Pink Sheets.

According to the SEC’s complaint filed in U.S. District Court for the Southern District of Florida, the scheme was perpetrated through Red Sea Management Ltd., a Costa Rican asset protection company that laundered millions of dollars in illicit trading proceeds out of the United States on behalf of its clients. The U.S. Department of Justice today announced related criminal charges against six of the individuals.

According to the SEC’s complaint, the fraudulent pump-and-dump scheme in CO2 Tech stock occurred from late 2006 to April 2007 through the efforts of the following individuals:

  • Jonathan R. Curshen, a Sarasota, Fla., resident who founded and led Red Sea.
    David C. Ricci and Ronny Morales Salazar of San Jose, Costa Rica, who were Red Sea stock traders.
    Ariav “Eric” Weinbaum and Yitzchak Zigdon of Israel, who were Red Sea clients.
    Robert L. Weidenbaum of Coral Gables, Fla., a stock promoter who operates a company called CLX & Associates.
    Michael S. Krome of Lake Grove, N.Y., a lawyer who allegedly wrote a fraudulent opinion letter.

In the related criminal action, charges brought by the Justice Department’s Criminal Division were unsealed against Curshen, Krome, Salazar, Weidenbaum, Weinbaum, and Zigdon. The defendants are charged in the Southern District of Florida variously with conspiracy to commit securities, mail and wire fraud; wire fraud; mail fraud; violating the securities regulation laws and obstruction of justice.

SEC Action | Permalink

TrackBack URL for this entry:

Listed below are links to weblogs that reference SEC Charges Seven with Global Warming Pump & Dump Scheme:


How is this a crime? They sold fake stock in a fake company with fake assets using fake letters, all for a fake problem! The problem is made up in the first place. Al Gore should also be arrested and charged.
Really, how is this a crime? I think they should fight this. If they did something wrong, then the government is also cheating us with taxes for a fake problem. It's getting COLDER, and we are not to blame. Taxing me won't stop the sun's actions.
It's all a scam.
These people need to fight this one and make the government sit and explain it's "data" based on grants and funds for opinions.

Posted by: Karla | Feb 21, 2011 7:57:38 AM

Post a comment