U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18979 / November 18, 2004
SECURITIES AND EXCHANGE COMMISSION V. PETER J. WILSON, CIV. ACTION NO. 1:04CV2290 (Judge Gaughan)
SEC CHARGES PETER WILSON WITH SCHEME TO DEFRAUD, IMPERSONATING NASDAQ AND AMEX OFFICIALS
The Securities and Exchange Commission today charged Peter J. Wilson, a former licensed registered representative, with securities fraud. In its complaint, filed in the United States District Court for the Northern District of Ohio, the Commission charges that Wilson sought to manipulate the price of stocks he traded and illegally obtain material, non-public information from public companies by impersonating officials from the NASDAQ Stock Market and the American Stock Exchange (AMEX).
The complaint alleges the following: From at least June 2003 through April 2004, Wilson, a 43-year-old resident of Rocky River, Ohio, engaged in a scheme to profit illegally from trading in the securities of at least five NASDAQ-listed issuers and two AMEX-listed issuers. After seeing an unusual upward spike in the share price or trading volume of a stock, Wilson would telephone the issuer at or about the time he traded the stock. Wilson's trading strategy generally was to sell the securities short prior to the calls. During these calls, Wilson used an alias and told a corporate officer of the issuer that he was an employee of NASDAQ or AMEX, depending on where the issuer's stock was listed. Using that false authority, Wilson then asked the corporate officers if they knew of a reason for their companies' unusually high share price or trading volume. Wilson was seeking-and in several of these telephone calls received-material, non-public information: that the company knew of no reason for the increased price or volume. In all but one case, Wilson instructed the company to issue a press release confirming that it knew of no reason for the increased price or volume. Two of the companies followed Wilson's instructions and issued such releases. Wilson knew that the companies' stock prices would drop as a result of these press releases.
The complaint also alleges that Wilson illegally attempted to drive down the share price of at least one issuer's stock by posting false and misleading information regarding that issuer on the Yahoo Finance internet message boards. In one such message, the Commission alleges, Wilson falsely stated that the issuer was being investigated for stock manipulation by the Commission.
The Commission's complaint charges that, as a result of his alleged misconduct, Wilson violated three antifraud provisions of the federal securities laws (Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder). The Commission is seeking a permanent injunction, disgorgement of ill-gotten gains, prejudgment interest, penalties and other equitable relief against Wilson.
In a related criminal case, the United States Attorney's Office for the Northern District of Ohio today announced the filing of an information charging Wilson with one count of securities fraud and one count of making false statements to the Commission during its investigation of this scheme.
The Commission wishes to acknowledge the cooperation and assistance provided in this matter by the United States Attorney's Office for the Northern District of Ohio, the Federal Bureau of Investigation's Cleveland, Ohio field office, and the Stock Watch department of the American Stock Exchange.