{"id":55426,"date":"2024-02-01T18:01:15","date_gmt":"2024-02-02T02:01:15","guid":{"rendered":"https:\/\/cjnotebook.com\/?p=55426"},"modified":"2024-02-01T18:01:15","modified_gmt":"2024-02-02T02:01:15","slug":"canadian-man-guilty-for-role-in-scheme-that-manipulated-penny-stock-prices-and-cost-investors-of-over-215-million","status":"publish","type":"post","link":"https:\/\/cjnotebook.com\/?p=55426","title":{"rendered":"Canadian Man Guilty for Role in Scheme That Manipulated Penny Stock Prices and Cost Investors of Over $215 Million"},"content":{"rendered":"

LOS ANGELES\u00a0<\/strong><\/span><\/p>\n

\"brownA trader for a group of hedge funds pleaded guilty this afternoon to participating in a scheme that manipulated penny stock prices to inflate the hedge fund\u2019s reported profits\u2014false gains that generated millions of dollars in management and performance fees, officials stated.<\/span><\/p>\n

It also caused investors to lose more than $215 million when the funds collapsed.<\/span><\/p>\n

Colin Heatherington, 49, of Vancouver, Canada, pleaded guilty to one count of conspiring to commit securities fraud and wire fraud and admitted his role in the scheme run out of Absolute Capital Management Holdings (Absolute Funds). <\/span><\/p>\n

This Cayman Island-based company managed eight hedge funds from offices in Mallorca, Spain.<\/span><\/p>\n

Heatherington was a securities trader who worked closely with the founder and chief investment officer of Absolute Funds, Florian Wilhelm J\u00fcrgen Homm, 64, a German financier who was indicted<\/a>\u00a0in March 2013 and is currently a fugitive from justice.<\/span><\/p>\n

As part of the scheme, Heatherington oversaw the purchase of billions of shares of United States-based penny stocks, which were then traded using various manipulative practices, such as cross trading, which fraudulently inflated the value of the stocks and, in turn, the value of the Absolute Funds.<\/span><\/p>\n

\"whiteHeatherington and others in the scheme also reaped profits through self-dealing trades in which they sold their own shares of artificially inflated penny stocks to the Absolute Funds.<\/span><\/p>\n

After this case was indicted, Heatherington was in Canada, and the United States sought extradition. After fighting extradition, Heatherington agreed last year to come to the United States.<\/span><\/p>\n

Another defendant in this case \u2013 Todd Michael Ficeto, 57, a former Beverly Hills stockbroker, was sentenced to six years<\/a> in federal prison after being convicted of 18 felonies relating to his managerial role in the scheme to manipulate penny stock prices.<\/span><\/p>\n

The scheme resulted in many millions of dollars in profits from fees, commissions, and self-dealing trades. Ficeto also allowed conspiracy members to trade the manipulated penny stocks through his company, among other fraudulent acts.<\/span><\/p>\n

Heatherington pleaded guilty before U.S. District Judge John A. Kronstadt, who scheduled a sentencing hearing for May 9. He faces up to 25 years in prison.<\/span><\/p>\n

The FBI investigated this matter.<\/span><\/p>\n

Assistant U.S. Attorneys Cassie D. Palmer of the Public Corruption and Civil Rights Section, Scott Paetty of the Major Frauds Section, and Ian V. Yanniello of the General Crimes Section prosecute this case.<\/span><\/p>\n

\n","protected":false},"excerpt":{"rendered":"

LOS ANGELES\u00a0 A trader for a group of hedge funds pleaded guilty this afternoon to participating in a scheme that manipulated penny stock prices to inflate the hedge fund\u2019s reported profits\u2014false gains…<\/p>\n","protected":false},"author":1,"featured_media":55427,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,3],"tags":[],"class_list":["post-55426","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fbi","category-u-s-department-of-justice"],"yoast_head":"\nCanadian Man Guilty for Role in Scheme That Manipulated Penny Stock Prices and Cost Investors of Over $215 Million<\/title>\n<meta name=\"description\" content=\"LOS ANGELES\u00a0 A trader for a group of hedge funds pleaded guilty this afternoon to participating in a scheme that manipulated penny stock prices to inflate\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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