The Securities and Exchange Commission today announced charges against Florida resident Todd Zinkwich for engaging in a fraudulent scheme to manipulate the market for numerous microcap stocks, which enabled his clients to sell millions of dollars' worth of stock to retail investors at inflated prices.

According to the SEC's complaint, from at least June 2017 to March 2018, individuals and groups who held large quantities of microcap stocks paid Zinkwich hundreds of thousands of dollars to facilitate a scheme to drive up demand for the stocks of certain issuers. As alleged in the complaint, Zinkwich arranged for his associate Eric Landis, whom the Commission previously charged for his role in this fraud, to generate an appearance of increased demand for the stocks. The complaint alleges that Landis accomplished this by placing thousands of "wash" trades - where one person uses the same or multiple accounts to be on both sides of a trade -using numerous accounts that Zinkwich and Landis controlled. According to the complaint, this manipulative trading scheme generated the false appearance of an upsurge of trading in the companies' stock and allowed Zinkwich's clients to sell millions of shares of stock into the public market at inflated prices.

The SEC's complaint, filed in the U.S. District Court for the District of Massachusetts, charges Zinkwich with violating the antifraud provisions of Sections 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder and with aiding and abetting Landis's violations of the anti-manipulation provisions of Section 9(a) of the Exchange Act. Without admitting or denying the SEC's allegations, Zinkwich consented to entry of a judgment that enjoins him from violating the charged provisions and a penny stock bar, with monetary relief to be determined by the court at a later date. The settlement is subject to court approval.

The SEC's case is being handled by Trevor Donelan, Jonathan Allen, Eric Forni, Kathleen Shields, J. Lauchlan Wash, Rebecca Israel, David Scheffler, and Amy Gwiazda of the SEC's Boston Regional Office, with assistance from Alex Lefferts in the SEC's Office of Market Intelligence, and in coordination with the Enforcement Division's Microcap Fraud Task Force. The SEC appreciates the assistance in this matter of the Federal Bureau of Investigation, the U.S. Attorney's Office for the District of Massachusetts, and the Financial Industry Regulatory Authority (FINRA).