Read the latest news relating to investor claims and broker fraud.
Man Sentenced to Jail after Securities Fraud Conviction
Posted on May 28, 2011
A California man was sentenced to four years in jail after pleading guilty to two counts each of conspiracy to commit securities fraud and money laundering.
27-year-old Matthew H. Brown was caught in an alleged securities fraud scheme known as the "pump and dump," where he and co-conspirators artificially inflated prices of targeted penny stocks then sold their shares for a huge profit.
Supposedly, Brown would target a specific company and deceive investors around the country to invest in their stock. When this artificial activity increased enough to bump the stock's value, Brown would allegedly sell his own shares and run.
By running the scheme, Brown and his co-conspirators reportedly pulled in more than $6 million in 2006-2007 alone. Most of that amount has to be returned to the federal government as part of the guilty plea.
Brown also will not be allowed to sell securities for the three years of his supervised release. We hope the people disadvantaged by this scheme are also able to recover their lost funds.
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