Eight People Indicted in $290 Million Penny Stock Pump & Dump Scheme

Eight People Indicted in $290 Million Penny Stock Pump & Dump Scheme

Eight People Indicted in $290 Million Penny Stock Pump & Dump Scheme 150 150 Rex Securities Law

New York City-September 11, 2014–Manhattan District Attorney Cyrus Vance, Jr. announced the indictment of eight people for allegedly defrauding thousands of investors in a penny stock “pump & dump” scheme. PennyPic.com, OxofWallStreet.com and MonsterStox.com were three of the companies that promoted the companies through newsletters emailed to investors.

The companies promoted include:

  • Smart Holdings, Inc. (SMHS)
  • Lyric Jeans Inc. (LYJN)
  • Hydrogenetics Inc. (HYGN)
  • Xynergy Holdings Inc.
  • Blast Applications, Inc.(BLAP)
  • Blue Gem Enterprise, Inc.(BGEM)
  • Mass Hysteria Entertainment Company Inc.(MHYS)
  • Recycle Tech Inc.(RCYT)
  • Sunpeaks Ventures (SNPK)

Unbeknownst to investors is that the authors of the newsletters owned stock in the companies they were promoting and had colluded with officials in the companies to drive up prices with misleading news releases, according the press release from the New York County District Attorney’s Office. 

Anthony Thompson, 38, of Bethesda, Maryland; Eric Van Nguyen, 30, of Quebec; and Jay Fung, 40, of Delray Beach, FL, are accused of working with the five officials of the companies from 4/2009-5/2012 to drive up the price of the penny stocks to induce investors to purchase shares. It is alleged that the eight defendants profited by more than $30 million from the scheme.

Thompson and Fung, as well as Hanna Schmieder (president of Lyric Jeans) , 39, of Los Angeles and Kenneth Oxsalida (president of Smart Holdings), 59, of Sebring, Florida, all pleaded not guilty before Judge Roger Hayes in Manhattan, according to ABC News reports. The others charged are Joseph Dervali, 54, Luz Rodriguez, 47, and Christopher Balseiro, 31. 

If you lost money as a result purchasing any of these stocks upon the recommendation of your stockbroker, you may be able to recover damages. Call to discuss legal options.

Rex Securities Law provides nationwide representation to investors seeking recovery of investment losses due to the negligence or fraud of stockbrokers and broker dealers. If you have questions about how your account has been handled, call to speak with an experienced securities attorney.  Most cases handled on a contingent fee basis meaning that you do not pay legal fees unless we are successful.

Rex Securities Law

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