SEC Charges Florida Resident with Market Manipulation Scheme

Litigation Release No. 24091 / April 4, 2018

Securities and Exchange Commission v. Gregory M. Bercowy, Civil Action No. 8:18cv792-T26-CPT (M.D. Fla. filed April 3, 2018)

The Securities and Exchange Commission today charged St. Petersburg, Florida resident Gregory M. Bercowy with a fraudulent scheme to manipulate the stock price of Aureus, Inc., a penny stock company incorporated in Nevada.

The SEC alleges that between August 4 and August 15, 2016, Bercowy, who is associated with a state-registered investment adviser, sold shares of certain Fortune 500 companies, including Abbott and Apple, in his relative's brokerage account in order to buy over three million shares of Aureus at a total cost of more than $2.8 million. According to the SEC's complaint, while Bercowy was accumulating these shares of Aureus, he entered (and later cancelled) a large number of orders to buy Aureus shares at prices higher than the then-current price of the stock. The orders allegedly were intended solely to maintain or boost the stock's price. The price per share of Aureus securities increased from $0.52 on August 4, 2016, to $1.62 on August 16, 2016. According to the SEC's complaint, Bercowy stated in recorded phone calls with a representative of a brokerage firm that he and others were trying to boost Aureus's stock price.

The SEC's complaint, filed in the U.S. District Court for the Middle District of Florida, charges Bercowy with violating Section 17(a)(1) and (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 seeks a permanent injunction against future violations, disgorgement of ill-gotten gains plus prejudgment interest, a penny stock bar, and monetary penalties.

The SEC's case was investigated by J. Lauchlan Wash, Trevor Donelan, Deena Bernstein, and Amy Gwiazda of the SEC's Boston Regional Office, in coordination with the Enforcement Division's Microcap Fraud Task Force. The SEC appreciates the assistance of the U.S. Attorney's Office for the District of Massachusetts and the Financial Industry Regulatory Authority (FINRA) in this matter.