SEC files suit against lawyers in penny stock scheme

[JURIST] The US Securities and Exchange Commission (SEC) [official website; JURIST news archive] said Thursday that it has filed suit [SEC complaint, PDF; press release] against the heads of a technology company and two lawyers who assisted the company in an illegal "pump and dump" penny stock scheme. Arizona lawyer David Stocker and Texas lawyer Phillip Offill Jr, the latter a former SEC enforcement officer, are alleged to have assisted Michigan-based AVL Global [press release archive] in issuing millions of shares of stock, promoting the company without disclosing the fact that it was was all but defunct. Most of the stock was purchased by Peter Fisher, father of AVL president N. Tyler Fisher, who sold it to the market, costing investors at least $160,000.

The allegations filed in the Eastern District of Michigan [official website] claim the participants in the scheme violated numerous laws, including federal security and antifraud provisions. The SEC seeks injunctive relief, reclamation of the illegally obtained funds, and punitive damages. N. Tyler Fisher settled the civil case against him, paying a $25,000 penalty and agreeing to refrain from overseeing public companies or participating in penny stock offerings for the next five years. The suit against Stocker and Offill marks the first time where the SEC is seeking damages from those who execute the legal logistics of such schemes without actually selling stock. The New York Times has more.

 

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