{"id":56916,"date":"2024-07-02T17:09:16","date_gmt":"2024-07-03T00:09:16","guid":{"rendered":"https:\/\/cjnotebook.com\/?p=56916"},"modified":"2024-07-02T17:09:16","modified_gmt":"2024-07-03T00:09:16","slug":"canadian-man-sentenced-to-prison-for-role-in-penny-stock-scheme-that-caused-215-million-in-losses","status":"publish","type":"post","link":"https:\/\/cjnotebook.com\/?p=56916","title":{"rendered":"Canadian Man Sentenced to Prison for Role in Penny Stock Scheme That Caused $215 Million in Losses"},"content":{"rendered":"

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0LOS ANGELES<\/strong><\/span><\/p>\n

\"\"A former trader for a group of hedge funds was sentenced to three years and six months in federal prison on Tuesday for his role in a scheme that manipulated penny stock prices, officials stated Tuesday.<\/span><\/p>\n

This scheme inflated the hedge funds\u2019 reported profits, resulting in millions of dollars in fraudulent management and performance fees.<\/span><\/p>\n

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

\u00a0 \u00a0 \u00a0 \u00a0 \u00a0 U.S. District Judge John A. Kronstadt sentenced\u00a0 Colin Heatherington, 49, of Vancouver, Canada, to three years and six months in federal prison.<\/span><\/p>\n

\"JusticeThe judge also ordered Heatherington to pay $215,815,031 with co-defendant Todd Michael Ficeto, 57, a former Beverly Hills stockbroker who was also convicted in this case following a jury trial<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Heatherington pleaded guilty on Feb. 1 to one count of conspiracy to commit securities fraud and wire fraud.<\/span><\/p>\n

He has admitted his role in the scheme run out of Absolute Capital Management Holdings (Absolute Funds). This Cayman Island-based company managed eight hedge funds from offices in Mallorca, Spain.<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \"\"\"\"\"silhouetteHeatherington 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\u00a0indicted<\/a>\u00a0in March 2013 and is currently a fugitive from justice.<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 As part of the scheme, which lasted from 2004 to June 2008, Heatherington oversaw the purchase of billions of shares of United States-based penny stocks. These stocks 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

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \"\" Heatherington and others in the scheme also reaped millions in profits through self-dealing trades in which they sold their own shares of artificially inflated penny stocks to the Absolute Funds.<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 After this case was indicted, Heatherington was in Canada, and the United States sought his extradition. After fighting extradition, Heatherington agreed in 2021 to come to the United States.<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Ficeto was\u00a0sentenced<\/a> to six years in federal prison after being found guilty by a jury in July 2019 of 18 felonies relating to his managerial role in the scheme to manipulate penny stock prices. It got him many millions of dollars from fees and commissions and self-dealing trades.<\/span><\/p>\n

Ficeto also allowed Heatherington and other members of the conspiracy to trade the manipulated penny stocks through his company, among other fraudulent acts.<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 The FBI investigated this matter.<\/span><\/p>\n

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 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 prosecuted this case.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0LOS ANGELES A former trader for a group of hedge funds was sentenced to three years and six months in federal prison on Tuesday for his role in a scheme that manipulated…<\/p>\n","protected":false},"author":1,"featured_media":56918,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-56916","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"yoast_head":"\nCanadian Man Sentenced to Prison for Role in Penny Stock Scheme That Caused $215 Million in Losses<\/title>\n<meta name=\"description\" content=\"\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0LOS ANGELES A former trader for a group of hedge funds was sentenced to three years and six months in federal prison on Tuesday for his role\" \/>\n<meta name=\"robots\" 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