Category Archives: Fraud

Two S. Floridians Indicted on Valentine Beauty Pump and Dump Stock Scheme-Miami, FL

May 2018-Miami, Florida

The US Attorneys Office for the Southern District of Florida announced that two Florida stock promoters have been charged with a $1 million pump and dump securities fraud scheme involving shares of Valentine Beauty Inc. (“VLBI“).

The individuals charged are:

  • Eddy Ubaldo Marin, 56, a convicted felon, of Ft. Lauderdale- charged with one count of securities fraud faces maximum statutory sentence of 20 years and a fine up to $5 million.
  • Shane R. Spierdowis, 27, Boca Raton-charged with one count of conspiracy to commit securities fraud faces maximum statutory sentence of up to 5 years and a fine up to $250,000.

According to the press release, Valentine Beauty was a beauty supply company in Sunrise, Florida which traded as VLBI on the OTC market. Marin and accomplices secretly obtained control of VLBI stock, using stock of one of his companies, Green Tree Capital.

In 2014 Marin, Speirdowis and others used press releases and penny stock newsletters to artificially increase the trading volume and price of VLBI which allowed them to dump their shares at a profit.

The Pump and Dump Scheme

The Financial Industry Regulatory Authority (FINRA) and the US Securities & Exchange Commission Office of Investor Education and Advocacy  (SEC) jointly issued a warning to investors regarding the use of dormant shell companies to commit fraud on unwary investors.

Dormant shell companies are often used in a pump and dump scheme where the scammer buys the low priced, rarely traded stock and then sets out to create a phony marketing scheme fueled by  press releases that falsely pump up the value of the stock.

Once the price has been pumped up by the false information, the scammer dumps his stock at the higher price and thereafter the stock value falls back to its original low price.

Investors considering placing funds into a penny stock investment would be wise to read the FINRA/SEC alert in its entirety.

If you purchased Valentine Beauty on the recommendation of your registered broker, contact us for a no charge consultation to discuss your options.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are 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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870

Clifton Stanley, Michael Watts, The Lifepay Group- Targeted in SEC Fraud Suit-Houston, TX

April 2018-Houston, Texas

The Securities and Exchange Commission (SEC) charged the following individuals and their companies with operating a $2.4 million Ponzi scheme targeting elderly retirees:

  • Clifton E. Stanley of Galveston, TX
  • Michael Watts of Sugar Land, TX
  • The Lifepay Group of Missouri, TX
  • SMDRE LLC of Sugar Land, TX

According to the SEC complaint, from 2010-2017 they used a collection of misrepresentations and phony promises  of outsized investment returns to convince these elderly victims to invest their retirement funds. Investors were promised returns of up to 36% per year.

Stanley is alleged to have used $1.3 million for personal expenses, including country club memberships, living and entertainment expenses.

Link to SEC complaint

If you were referred to invest in this scheme by a registered stockbroker you may be able to recover your losses from the broker’s employer. Call for a no charge consultation to learn about your options.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are 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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Greg Smith/Pastor Kirbyjon Caldwell Indicted On Chinese Bond Scam-Shreveport,LA-Houston,TX

April 2018-Shreveport, LA

Shreveport resident Gregory Alan Smith, 55, and Kirbyjon H. Caldwell, 64, of Houston, TX, were indicted by a federal grand jury in a 13 count indictment for allegedly bilking unsuspecting investors out of over a million dollars.

Smith is operator of Smith Financial Group at 7330 Fern Ave., in Shreveport and Caldwell is Senior Pastor of Windsor Village United Methodist Church in Houston. The church is reportedly one of the largest Protestant churches in the U.S. According to Click2Houston Pastor Caldwell gained national notoriety when President George W. Bush made him his spiritual advisor.

Investors were lured to invest in allegedly worthless Historical Chinese bonds issued by the former Republic of China prior to losing power in 1949 and are not recognized by China’s current government.

According to FINRA records, Gregory A. Smith was a licensed broker who worked for New England Securities from 12/1999-7/2010. Smith was discharged by New England Securities in 7/2010 for failing to follow company policy with respect to outside business activities. In 2012, FINRA permanently barred Smith from associating with any FINRA member in any capacity, in part for commingling investor funds in his business account and for misappropriating investor funds.

The Financial Industry Regulatory Authority (FINRA) is the agency that licenses and regulates stockbrokers and brokerage firms. FINRA requires brokers and brokerage firms to report customer complaints and disputes as well as regulatory sanctions. In addition brokers are required to disclose certain financial matters such as personal bankruptcies, judgments and liens.

Smith and Caldwell are charged with  wire fraud and money laundering and face decades in prison if convicted.

SEC complaint vs. Gregory A. Smith and Kirbyjon Caldwell.

If you are a victim of this apparent scam, call for a no charge consultation to discuss your options.

Rex Securities Law , with offices in Boca Raton, FL,  and  Austin, TX,   provides representation to  investors  nationwide who are 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.

Nationwide Representation

Rex Securities Law

TollFree: 877-224-3199

Florida-561 391 1900 

Texas-512-329-2870