The Securities and Exchange Commission (SEC) has announced a significant legal victory with a final judgment regarding a fraudulent scheme that resulted in substantial financial gains from manipulated stock prices. This judgment specifically involves an individual named James B. Panther, Jr., who played a key role in inflating the price of shares belonging to a small-cap issuer, ultimately profiting by selling the shares to unsuspecting investors.
The case revolves around a complaint initially filed on May 15, 2018, which highlighted an extensive fraudulent operation orchestrated by another individual, Francisco Abellan Villena. Abellan devised a strategy to obscure his control over and sale of Biozoom, Inc. shares, using various deceptive measures, including fake purchase agreements and a network of other people to mask his true ownership.
Panther allegedly aided Abellan in employing manipulative trading tactics and orchestrating an aggressive promotional campaign designed to artificially boost the share price of Biozoom. Evidence revealed that through their combined efforts, they were able to execute unlawful sales of Biozoom stock, accumulating over $33 million through these illicit activities.
In response to the SEC’s request for a summary judgment, the Court agreed and imposed several sanctions against Panther. The judgment includes a permanent injunction preventing him from engaging in any further violations related to antifraud and registration provisions under federal securities laws. Additionally, Panther has been ordered to pay a civil penalty of $100,000 and has been barred from participating in penny stock offerings for the next ten years.
The SEC’s actions were not limited to Panther. The agency has also successfully secured final judgments against three other co-defendants involved in the scheme. Notably, on November 27, 2019, the Court imposed a default judgment against Canadian lawyer Faiyaz Dean, who was fined $160,000. Following this, on September 11, 2020, a separate judgment was rendered against Abellan, which included a permanent injunction and mandated a $15 million civil penalty. Guillermo Ciupak also faced similar legal repercussions, being enjoined from violating relevant securities laws.
In an earlier action dating back to 2013, the SEC had already initiated steps to mitigate the fallout from the fraudulent sales, freezing the proceeds from the illicit Biozoom transactions. The agency later established a fair fund that has successfully reimbursed over $16 million to affected investors, recovering significant losses incurred due to the deceptive practices of the individuals involved.
This case exemplifies the SEC’s commitment to enforcing securities laws and protecting investors from fraudulent schemes, emphasizing the consequences faced by individuals engaged in market manipulation and other illegal activities.