The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against a broker-dealer and a transfer agent for allegedly creating and selling more than a dozen “blank check” companies. The Commission also charged three individuals involved in the scheme.
In its complaint, the SEC named broker-dealer, Spartan Securities Group, transfer agent, Island Capital Management as defendants.
Defendants created and sold shares of 19 bogus public companies
The Commission alleged that the defendants helped create and sell shares of at least 19 bogus public companies. Spartan Securities initiated the scam by filing fraudulent applications with the Financial Industry Regulatory Authority to list the common stock of the fake companies. As a result, the defendants were able to sell shares to public investor.
Additionally, the SEC accused Spartan Securities’ principals, Carl E. Diller and Micah J. Eldred of knowingly signing the fake documents submitted to FINRA.
Furthermore, the Commission also alleged that David D. Lopez failed to investigate the warnings raised by FINRA. He failed to at least learn about the companies that registered to the regulator.
