SEC Charges Virginia Man with Manipulating Microcap Stock
Litigation Release No. 25143 / July 15, 2021
Securities and Exchange Commission v. Marlon Muller, No. 21-cv-6048 (S.D.N.Y. filed July 14, 2021)
The Securities and Exchange Commission announced charges against Marlon Muller for engaging in a pattern of coordinated trading intended to artificially raise and sustain the price of microcap issuer EMS Find, Inc. (EMSF) and to generate liquidity.
The SEC's complaint, filed in the United States District Court for the Southern District of New York, alleges that, using an internet chat application, Muller repeatedly instructed an associate when and how to submit buy and sell orders for EMSF shares, using several brokerage accounts the associate controlled at multiple broker-dealers, in order to reach the price and liquidity levels Muller wanted. This manipulative trading activity allegedly distorted the true value of EMSF shares as well as the actual market interest in EMSF, and operated as a fraud on the investing public. According to the complaint, from June until September 2015, Muller received compensation from the associate as well as payments from another entity trading EMSF shares, totaling over $300,000. During the same period, at least 1,500 retail accounts, including over 300 individual retirement accounts, invested over $1 million in EMSF stock. The complaint further alleges that after the defendant stopped manipulating the stock, EMSF's stock price fell and those investors who still held the stock lost value.
The SEC's complaint charges Muller with violating the antifraud provisions of the federal securities laws, and seeks permanent injunctive relief, disgorgement of ill-gotten gains plus prejudgment interest, a civil penalty, and an order permanently prohibiting Muller from participating in any offering of a penny stock and other injunctive relief.
The SEC's investigation was conducted by Kristine Zaleskas, Joseph Darragh, and Michael Paley of the Microcap Fraud Task Force along with Judith Weinstock, all of the New York Regional Office. The investigation was supervised by Sanjay Wadhwa, and the litigation will conducted by Paul Gizzi, and Ms. Zaleskas.