The Securities and Exchange Commission filed charges against two individuals for their role in soliciting retail investors as part of a microcap pump and dump scheme and their theft of $500,000 from an investor.

The SEC's complaint alleges that between 2016 and 2018, Ubong Uboh and Tyler Crockett cold-called investors and aggressively touted the prospects of several microcap issuers. Using fictitious names and backgrounds, Uboh and Crockett allegedly lied to investors about the issuers' relationships with well-known financial institutions and made baseless predictions about their businesses. In return, Uboh and Crockett were allegedly paid hundreds of thousands of dollars by Garrett O'Rourke and Michael Black, two individuals the SEC previously charged with engaging in a pump and dump scheme involving the same microcap issuers Uboh and Crockett touted. The complaint alleges that retail investors lost at least $1.2 million from purchasing shares of these issuers.

The SEC's complaint further alleges that Uboh and Crockett misappropriated $500,000 from an investor by convincing him to buy shares of a company in a fraudulent private offering, falsely claiming that the company had entered into a partnership with a well-known technology company and had significant growth potential. Instead of investing the money, Uboh and Crockett allegedly kept it for themselves.

The SEC's complaint, filed in the U.S. District Court for the Eastern District of New York, charges Uboh and Crockett with violating the antifraud provisions of 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 complaint seeks permanent injunctions, disgorgement of allegedly ill-gotten gains with prejudgment interest, civil penalties, and penny stock bars. Crockett has agreed to permanent injunctive relief and a penny stock bar, with monetary relief to be resolved at a later date. This partial settlement is subject to court approval.

In a parallel action, the U.S. Attorney's Office for the Eastern District of New York today announced criminal charges against Uboh and unsealed criminal charges against Crockett, who pled guilty earlier this year.

Investors can find additional information about pump-and-dump scams, including the warning signs of fraud, on Investor.gov. The Office of Investor Education and Advocacy and Division of Enforcement's Retail Strategy Task Force have also issued Investor Alerts about these types of fraud, including Investor Alert: Fraudulent Stock Promotions, Investor Alert: Don't Invite Investment Scams to Find You, and Investor Alert: Beware of Stock Recommendations on Investment Research Websites.

The SEC's investigation was conducted by Rhonda L. Jung, Melissa Coppola, and Sandeep Satwalekar, under the supervision of Lara Shalov Mehraban. The SEC's litigation is being led by Alex Vasilescu and Ms. Jung. The SEC appreciates the assistance of the U.S. Attorney's Office for the Eastern District of New York, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.