The Securities and Exchange Commission announced charges against Domenic Calabrigo, a resident of the Bahamas, Curtis (Curt) Lehner and Courtney Vasseur, residents of Canada, and Hasan Sario, a resident of Turkey, for engaging in multiple fraudulent schemes to "pump and dump" thinly-traded microcap issuers. The SEC has obtained emergency relief from the court, including an order to freeze and repatriate assets of the defendants.

The SEC's Complaint alleges that between January 2016 and December 2018, the defendants and their associates obtained a controlling interest in the securities of the microcap issuers through a series of transfers and purchase agreements with nominee shareholders. Once they had amassed a significant majority of the shares of the stocks, certain defendants secretly funded campaigns to promote the stocks to unsuspecting investors in the United States and elsewhere. As alleged, when those campaigns triggered increases in the demand for the stocks, the defendants sold the stocks via offshore trading platforms for significant profits. The SEC's Complaint also alleges that some of the defendants used encrypted text and phone applications, and arranged to buy and sell penny stocks from multiple offshore accounts, in furtherance of the fraud. According to the Complaint, the defendants and their associates yielded net proceeds of over $39 million from the sale of shares of the issuers.

The SEC's Complaint, filed in federal district court in New York, charges the Defendants with violating, or in the alternative aiding and abetting violations of, the registration, antifraud, and market manipulation provisions of Sections 5(a), 5(c), 17(a)(1), and 17(a)(3) of the Securities Act of 1933 and Sections 9(a)(2) and 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder. The SEC is seeking permanent injunctions, disgorgement of allegedly ill-gotten gains plus prejudgment interest, penny stock bars and penalties against all Defendants.

The U.S. Attorney's Office for the Southern District of New York announced parallel criminal charges against Calabrigo, Lehner, Sario, and Vasseur.

The SEC's investigation was conducted by Kristine Zaleskas, Judith Weinstock and Michael Paley of the SEC's New York Regional Office and Trevor Donelan of the SEC's Boston Regional Office. The litigation will be led by Paul Gizzi of the New York Regional Office and Ms. Zaleskas.

The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York, the Federal Bureau of Investigation, the Financial Industry Regulatory Authority, and the British Columbia Securities Commission.