U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21259 / October 22, 2009
Securities and Exchange Commission v. Lambros D. Ballas, Case No. C-09-05036 (JW) (N.D. CA filed Oct. 22, 2009)
SEC CHARGES BROKER FOR REPEATEDLY DISSEMINATING FAKE PRESS RELEASES AND MAKING FRAUDULENT INTERNET POSTINGS
The Securities and Exchange Commission today charged Lambros Ballas, a licensed securities broker at a New York stock brokerage firm, with using phony press releases to manipulate the stock prices of multiple publicly traded companies. Ballas created and then distributed fake press releases purporting to announce good news regarding the companies, including that Google was buying one company at a substantial premium. Ballas then posed as an investor on Internet message boards, touting the announcements he had fabricated. In one instance, Ballas' scheme caused the stock price to increase by over 75 percent within a few hours of the issuance of his phony press release. Among other relief, the SEC is seeking an emergency court order to enjoin Ballas from further fraudulent activity.
The Commission's complaint, filed in federal court in San Jose, Calif., and documents filed in support of the requested emergency relief, alleges:
The SEC further alleges that for at least one of the stocks he touted, Ballas purchased shares of the company immediately before disseminating the phony press release he had drafted.
In its federal court action against Ballas, the SEC alleges Ballas violated Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. The SEC seeks an ex parte temporary restraining order, a preliminary and permanent injunction, expedited discovery, disgorgement with prejudgment interest, and civil penalties against Ballas.
The Commission appreciates the significant assistance of FINRA, the Financial Industry Regulatory Authority. The Commission's investigation is continuing.