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U.S. Securities and Exchange Commission


Litigation Release No. 20776 / October 8, 2008

Securities and Exchange Commission v. Glenn Grossman, Lawrence Steven Cohen, David Schmidt, and John Zanic, Civil Action No. 08 Civ. 8078 (DC) (S.D.N.Y.)

SEC Charges Four Stock Promoters With Market Manipulation

The Securities and Exchange Commission announced today that on September 18, 2008 the Commission charged four stock promoters with engaging in a fraudulent broker bribery scheme designed to manipulate the market for the common stock of Guyana Gold, Corp. ("GYGC").

The complaint, filed on September 18, 2008 in federal court in Manhattan, alleges that beginning in at least April 2008, Glenn Grossman, Lawrence Steven Cohen, David Schmidt and John Zanic (the "Defendants") engaged in an undisclosed kickback arrangement with an individual who claimed to represent a group of registered representatives with trading discretion over the accounts of wealthy customers. Unbeknownst to the Defendants, the individual actually was an undercover FBI agent. The Defendants promised to pay a 30% kickback to the agent and the registered representatives he purported to represent in exchange for the purchase of up to $3 million of GYGC stock through the customers' accounts.

The complaint further alleges that from May 1-5, 2008, Zanic instructed the agent to purchase approximately 115,000 shares of GYGC stock for a total of approximately $72,000 through matched trades using detailed instructions concerning the size, price and timing of the purchase orders. Thereafter, the Defendants paid bribes of almost $14,000 to the agent.

The complaint charges the Defendants with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The Commission seeks permanent injunctive relief, disgorgement of ill-gotten gains, if any, plus pre-judgment interest, civil penalties, and a judgment prohibiting Defendants from participating in any offering of penny stock.

The Commission acknowledges assistance provided by the U.S. Attorney's Office for the Southern District of New York and the Federal Bureau of Investigation in this matter.

SEC Complaint in this matter



Modified: 10/08/2008