A White Plains, N.Y. man and two companies will pay a $3.5 million fine to the Securities and Exchange Commission to settle allegations of fraud and market manipulation.
Joseph A. Fiore, 58, Berkshire Capital Management Company and Eat at Joe’s agreed to settle the nearly two-year-old case in U.S. District Court for the Southern District of New York.
The June 2018 complaint alleged that between March 2013 and March 2014, Fiore manipulated the market for, and scalped, the stock of microcap issuer Plandai Biotechnology, Inc.
According to the complaint, Fiore financed and directed a promotional campaign aimed at public investors that included recommendations to buy Plandai stock without disclosing that Fiore beneficially owned Plandai stock, and that he intended to sell and was selling into the public market millions of shares.
Fiore engaged in manipulative trading of Plandai stock through two companies he controlled, Berkshire and SPYR, made false and misleading statements to brokerage firms through which he traded Plandai stock, the complaint said.
“On at least fourteen separate occasions, from May 2013 to June 2013, Fiore engaged in ‘matched’ or ‘wash’ trades, meaning that he caused accounts he controlled to buy and sell exactly the same amount of Plandai stock, at exactly the same price, creating a false appearance of legitimate market activity with no change in beneficial ownership,” the complaint said.
Fiore also repeatedly engaged in a manipulative trading practice known as “marking the close,” the SEC alleged, whereby he executed trades at or near the close of the market for the purpose of artificially inflating the end-of-day share price of Plandai stock and “creating the appearance of active trading.”
From May 2013 to September 2013, Fiore set the closing price for Plandai stock on at least eighteen trading days.
‘Painting The Tape’
Finally, Fiore also manipulated the market for Plandai stock using a deceptive trading technique known as “painting the tape,” by submitting multiple buy offers for Plandai stock on the same day, the SEC alleged.
The offers were often at gradually increasing prices and within a short period of time, for the purpose of artificially inflating the share price and creating the appearance of active trading, the complaint said.
Fiore “furthered his scheme by knowingly or recklessly making materially false and misleading statements to at least two brokerage firms,” the SEC said.
Fiore also failed to disclose his beneficial ownership of more than 5% of the outstanding shares of Plandai stock. In addition, the complaint alleged that SPYR, formerly known as Eat at Joe’s, failed to register as an investment company with the SEC.
Without admitting or denying the allegations, defendants consented to final judgments that require Fiore, Berkshire, and SPYR jointly and severally to pay $2 million of disgorgement and prejudgment interest, with each defendant separately paying a $500,000 civil penalty.
]Fiore and Berkshire are barred for five years from participating in any penny stock offering, and Fiore consented to a five-year bar from acting as an officer or director of any issuer that has a class of securities.
InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 year s of daily journalism. John may be reached at email@example.com. Follow him on Twitter @INNJohnH.
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