SEC loads webcast host on stock trades as part of pump and dump system


What would you like to know

  • The host of the webcast and the ex-stock broker are said to have spread over 100 false rumors about public companies in order to generate illicit profits.
  • He agreed to cooperate with the SEC, pay a restitution of $ 374,835 and be kicked out of the industry.
  • He recently pleaded guilty to the scheme in a parallel criminal case led by the Department of Justice.

The Securities and Exchange Commission has charged the host of a stock market trading webcast with securities fraud, accusing him of spreading more than 100 false rumors about state-owned companies in order to generate illicit profits under of a two-year program.

According to the SEC’s complaint, filed Thursday in U.S. District Court for the Northern District of Georgia in Atlanta, former broker Mark Melnick, 41, of Marlboro, New Jersey, was told companies ahead of time about the matter. which another participant in the program planned to spread false rumors, then shared the names of these companies with subscribers in his online trading room.

Melnick, who held the title of director of trading psychology, reportedly told subscribers he took positions in the companies, while other program participants also spread the false rumors through financial reporting services. real-time, financial discussion forums and message boards. False rumors have temporarily pushed up the prices of company securities, according to the SEC.

Between January 2018 and January 2020, Melnick is said to have propagated or exchanged false rumors more than 100 times, generating more than $ 374,000 in illicit profits. The other participants in the program also traded around the false rumors, generating significant profits, according to the SEC.

The SEC complaint accused Melnick of violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.

Melnick has agreed to cooperate with the SEC Enforcement Division and has consented to the entry of a judgment which, subject to court approval, will permanently prohibit him from violating the anti-fraud provisions of federal securities laws. , according to the SEC.

The deal also requires Melnick to pay a restitution of $ 374,835 plus pre-judgment interest and a civil penalty in an amount to be determined later, the SEC said. Melnick also agreed to a penny stock bar and to be banned from the securities industry, according to the SEC, adding that his investigation is ongoing.

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