Securities Attorney Plus Market Manipulation Scheme Equals Go To Jail

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Securities Attorney and Market Manipulation

A California securities attorney finds himself in hot water over his role in schemes to manipulate the stock of two publicly traded microcap companies, Greenway Technology and Crown Marketing. Jehu Hand, the defendant, endures a two week trial for conspiracy, securities fraud and wire fraud.  Following the guilty verdict, Hand awaits sentencing.

Regarding the Greenway Technology stock, Hand and his co-conspirators utilize front companies to conceal control over the majority of Greenway’s stock.  With this purpose in mind, Hand ensures the company stock is available for public sale. Shortly thereafter, Hand authors and disseminates several false opinion letters to brokerage firms. With millions of shares available, Hand and his co-conspirators hire stock promoters to send blast e-mails to potential investors. The marketing effort positions Greenway as a company on the verge of acquiring hotels catering to gay and lesbian travelers. Unfortunately, however, the company lacks the funds to acquire any such properties. In the end, the false promotional campaign enable Hand and his co-conspirators to sell millions of shares of Greenway stock at artificially inflated prices.

The scheme involving the Crown Marketing stock follows a similar pattern. Once again, Hand and his co-conspirators utilize front companies to hide their control over most of Crown’s stock. Similarly, the stock is sold to the public as a result of a false filing that Hand makes with the U.S. Securities and Exchange Commission. Following the filing, the con artists distribute misleading press releases and promote Crown’s stock. In this instance, Crown allegedly possesses a revolutionary drug-delivery technology. The problem, however, is that there is no valid commercial interest for the product. As with Greenway, once Crown’s stock price and trading volume spikes, they dump the stock. In doing so, Hand and his partners profit handsomely.

Swift Justice and Stiff Penalty  

In total, between the Greenway and Crown schemes, Hand and his co-conspirators cause losses of more than $1.5 million.

The charge of conspiracy provides a sentence of no greater than five years in prison, three years of supervised release, and a fine of $250,000, or twice the gross loss to the victim.  The charges of securities fraud and wire fraud provide for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000, or twice the gross gain or loss.