Business · December 30, 2020

SEC Obtains Final Judgements Against Stock Promoters

(STL.News) On December 30, 2020, the U. S. District Court for the Southern District of New York entered final judgments against two penny stock promoters whom the Commission charged in connection with several alleged pump-and-dump schemes involving stocks they were touting in their supposedly independent newsletters.

The SEC‘s complaint in this action, filed in November 2014, alleged that Anthony Thompson, Jr., Jay Fung, and a third defendant, Eric Van Nguyen, worked in concert to gain control of a large portion of shares in the stock of microcap companies, then hyped those stocks in newsletters they distributed to prospective investors.  According to the complaint, the newsletters published by Thompson, Fung, and Van Nguyen misleadingly stated that they “may” or “might” sell shares they owned when in reality they always intended to sell — and in some instances already were selling – the stocks they were promoting. As alleged, they also failed to fully disclose in their newsletters the amounts of compensation they were receiving for promoting the stocks.

Thompson and Fung, who were both previously convicted in a parallel state criminal case for conduct that was the subject of the SEC’s action, each consented to the entry of a final judgment enjoining them from future violations of the anti-touting provisions of Section 17(b) of the Securities Act of 1933.  Thompson further consented to pay disgorgement of $624,882 plus prejudgment interest of $137,381, and Fung consented to pay disgorgement of $1,766,083 plus prejudgment interest of $244,308. Fung’s obligation to pay disgorgement and prejudgment interest will be deemed satisfied by the $2,800,000 he was ordered to pay pursuant to an order of restitution entered in a related criminal action filed by the Manhattan District Attorney’s Office. The SEC’s litigation continues with respect to Van Nguyen.

The SEC’s litigation has been handled by Peter Pizzani, Mark R. Sylvester, and Thomas P. Smith, Jr., and supervised by Sanjay Wadhwa, all of the New York Regional Office.