The U.S. Securities and Exchange Commission (SEC) announced that it has identified three additional individuals to charge in a penny stock manipulation case that was filed last year against alleged corrupt brokers and others.
The agency filed a request in a Brooklyn federal court to lift the stay in its civil action with the intent of filing an amended complaint alleging that two additional brokers, Michael Morris and Ronald Heineman, facilitated this scheme through their brokerage firm while a third man, attorney Darren Ofsink, profited illegally by selling unregistered shares for which no registration exemption applied.
The SEC’s amended complaint charges Morris with violations of the antifraud provisions and securities registration provisions of the federal securities laws. Heineman is charged with violations of the antifraud provisions and Ofsink is charged with violating the securities registration provisions.
The amended complaint seeks a final judgment ordering them to disgorge ill-gotten gains plus prejudgment interest, imposing financial penalties and permanently enjoining them from future violations of the federal securities laws.
Joseph G. Sansone, co-chief of the SEC Enforcement Division’s Market Abuse Unit, said:
Brokers serve important gatekeeping functions in our markets and deterring market manipulation is among their critical responsibilities. We allege that Morris and Heineman didn’t just fail to deter the stock fraud being perpetrated at their brokerage firm, they actively participated in it.
In a parallel action, the U.S. Attorney’s Office for the Eastern District of New York Thursday announced criminal charges against Morris and Ofsink.