Gendarme Chief Executive Ezat Rahimi of Elk Grove, Calif., and Vice President Ian Lamphere of Lawrenceville, Vt., allegedly acquired deeply discounted penny shares under the pretense of a long-term investment and then dumped them into the market. This essentially put in effect public stock distributions without following federal securities law disclosure requirements, according to the SEC
Gendarme is accused of entering into agreements with penny stock issuers in early 2008, giving the firm the right to purchase stock at 30% to 50% discounts and falsely representing itself to issuers in an effort to avoid registration and disclosure requirements.
The SEC also accused Gendarme's outside attorney, Cassandra Armento of Greenwich, Conn., of securities-law violations, saying she issued more than 50 false legal opinion letters in support of Gendarme's activities. The letters said the company wasn't an underwriter and had no intent of selling the stock, according to the SEC.
An attorney for Gendarme said he was reviewing the charges.
The SEC is seeking injunctive relief, disgorgement of illegal gains, penalties and an order barring Gendarme, Rahimi and Lamphere from participating in offering penny stocks. It is seeking injunctive relief and penalties against Armento. For the latest updates PRESS CTR + D or visit Stock Market news Today
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