California Attorney Convicted by Massachusetts Jury of Securities Fraud in Scheme to Manipulate Stock of Two Companies
Litigation Release No. 24159 / June 6, 2018
USA v. Jehu Hand, Case No. 1:15-cr-10386-WGY (D. Mass.)
Securities and Exchange Commission v. Jehu Hand, et al., Civil Action No. 1:15-cv-14109 (D. Mass. filed Dec. 10, 2015)
The Securities and Exchange Commission announced that on May 21, 2018, a jury in federal court in Boston, Massachusetts convicted Jehu Hand, a licensed attorney in California, of securities fraud, wire fraud, and conspiracy to commit those offenses in connection with two pump-and-dump schemes that defrauded investors in Greenway Technology, a Las Vegas, Nevada-based company purporting to develop resorts for gay and lesbian travelers, and a second company, Crown Marketing. He will be sentenced by the court at a later date.
The allegations regarding Greenway Technology in the criminal indictment against Hand stem from the same conduct alleged in the SEC's complaint against him. According to the SEC's complaint, filed in federal court in Boston on December 10, 2015, Hand facilitated a scheme to pump and dump Greenway's stock by authoring false legal opinion letters that were designed to evade restrictions on stock sales by company insiders and clear the way for Greenway stock held by him and other scheme participants to be sold to unsuspecting investors in the market. According to the complaint, Hand and his co-schemers secretly planned and orchestrated the sale of Greenway stock to the public without proper securities registration statements and at prices artificially inflated by news releases, promotional materials, or blast e-mails containing false, exaggerated or misleading information, and by engaging in undisclosed coordinated trading of the stock. These efforts were designed to generate the appearance of demand for the stock and to increase its price even though Greenway had no operations or assets at the time. According to the complaint, between August 2012 and January 2013, after the stock price had been pumped, the participants in the scheme sold more than 12 million net shares of Greenway stock, causing losses to the investing public of more than $850,000.
The SEC's action against Hand, which is pending, seeks disgorgement of ill-gotten gains plus pre-judgment interest and penalties as well as a penny stock bar and permanent injunctions against further violations of the securities laws.