SEC files lawsuit against entities and individuals engage in microcap fraud scheme

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Gomes regularly used foreign nominee entities and trading accounts to hide the identities of his control group associates while unlawfully selling large amounts of microcap stocks in the open market. The scheme enabled his control group associates to avoid restrictions under the U.S. securities laws, which prohibits the sales of stocks by corporate control individuals without public registrations.

The SEC alleged that Gomes and his control persons deceived unsuspecting investors who believe they were buying shares in the ordinary course of the market. In reality, the investors were purchasing shares dumped by company insiders.

Additionally, the SEC alleged that various stock promoters boosted such illegal stock sales through campaigns that include false and misleading information designed to capitalize on the COVID-19 pandemic.

For example, the Commission noted that the alleged promotional campaigns included claims that Sandy Steele can produce medical quality facemasks while WOD Retail has automated kiosks for retailers to use in response to the COVID-19 pandemic.