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Press Release


SEC Charges California Lawyer and Two Massachusetts Men Behind Scheme to Manipulate Stock of Sports Ticket Broker

Washington D.C., Nov. 6, 2014

The Securities and Exchange Commission today charged an attorney in Orange County, Calif., and two men in Massachusetts behind a pump-and-dump scheme that defrauded investors in a Boston-based ticket brokering business.

The SEC alleges that Richard Weed, a partner in a Newport Beach law practice, facilitated a scheme to pump and dump the stock of CitySide Tickets Inc., which he helped structure into a publicly traded company through reverse mergers.  Weed created backdated promissory notes and authored false legal opinion letters that enabled Thomas Brazil and Coleman Flaherty to obtain millions of purportedly unrestricted shares of stock in the company.  Investors were then blitzed with a false and misleading promotional campaign touting CitySide Tickets as a budding national leader on the verge of acquiring smaller ticket firms across the country and positioning itself as an attractive takeover target for Ticketmaster.  As the company’s stock price increased on the false hype, Brazil and Flaherty sold their shares to unsuspecting investors for illicit proceeds of approximately $3 million, and Weed was well-compensated for his role in the scheme.  Shortly thereafter, the market for CitySide Tickets stock collapsed and the company eventually went out of business.

In a parallel case, the U.S. Attorney’s Office for the District of Massachusetts today announced criminal actions against Weed, Brazil, and Flaherty.

“CitySide was billed as the hottest ticket in town and investors were encouraged to get in the game when the playing field was actually tilted against them,” said Paul G. Levenson, Director of the SEC’s Boston Regional Office.  “Weed exploited his position of legal authority to enable Brazil and Flaherty to get the stock needed to pull off the scheme, and he served as an officer and director of CitySide to help them secretly control the company.” 

According to the SEC’s complaint filed in federal court in Boston, all of the false promotions painted a rosy, optimistic picture of a company that was actually in dire financial straits.  For example, one promotional alert falsely claimed that CitySide Tickets was “in the process now of swallowing up 5 smaller ticket resellers that could send next year’s profits through the roof.”  In reality, CitySide Tickets lacked the means for such acquisitions.  The alert further embellished that the company’s growth from purportedly swallowing up smaller fish in the ticket-selling market would make CitySide Tickets “an irresistible takeover target for Ticketmaster, the biggest fish of all.”  The alert estimated that a Ticketmaster acquisition of CitySide Tickets “could easily jump this under-50-cent stock to $2.50 - $3.50 overnight.”    

The SEC’s complaint charges Brazil, Flaherty, and Weed with violating antifraud provisions of the federal securities laws and related rules.  The SEC is seeking disgorgement of ill-gotten gains from the scheme plus interest and penalties as well as penny stock bars and permanent injunctions against further violations of the securities laws.  The SEC also is seeking to bar Weed from serving as an officer or director of any public company.  Weed lives in Newport Beach, Brazil lives in Topsfield, Mass., and Flaherty lives in Hingham, Mass.

The SEC’s investigation was conducted by Andrew J. Palid and Mark Albers of the SEC’s Boston Regional Office and supervised by Michele T. Perillo.  The SEC’s litigation will be led by Martin F. Healey.  SEC attorney Eric A. Forni has been appointed a Special Assistant U.S. Attorney in the parallel criminal case.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of Massachusetts, Federal Bureau of Investigation, and Financial Industry Regulatory Authority.

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