SEC Accuses Miami 'Penny-Stock' Promoters of Fraud
Beware of what you see here in the Magic City: very little is real. The boobs? Nope. Those lips? Collagen-enhanced. Even that sweet Lamborghini is just a rental. We all know you ended up with the Datsun after your divorce.
So it might not come as a shock that what little connection Miami has to Wall Street is also a sham. Earlier this week the Securities and Exchange Commission filed civil fraud charges against Miami-based firm Wall Street Capital Funding LLC for promoting bogus energy companies.
The Feds claim that WSCF "knowingly or recklessly played a critical role in numerous penny-stock scams" by creating and distributing promotional material for ghost companies like PrimeGen Energy Corp.
According to the lawsuit:
PrimeGen purported to be headquartered in Bridgewater, New Jersey and to have operations in Russia. According to its press releases, PrimeGen supposedly brought at least twelve oil wells into production in the span of nine months and generated many millions of dollars of revenues. PrimeGen, however, was a pure scam: its corporate headquarters were a rented mailbox in a UPS Store opened with a do-not-forward instruction; its phone line was unattended and never placed outgoing calls; and its web page was generated by copying the source code from another company's web site.
The SEC alleges that WSCF owners Philip Cardwell and Roy Campbell, along with associate Aaron Hume, promoted PrimeGen and other companies' false business information promising huge returns on cheap (hence "penny") stocks. In return, WSCF was paid in these companies' stock, which would rise in value with each duped investor.
The lawsuit demands Cardwell, Campbell, and Hume return their ill-gotten gains and pay penalties for their scheme.
Get the Weekly Newsletter