The Securities and Exchange Commission today filed two complaints in the United States District Court for the Eastern District of New York charging four individuals and five entities for their roles in an allegedly fraudulent microcap scheme that generated more than $10 million in unlawful stock sales.
The SEC also is seeking an order to freeze the assets of seven of the defendants and one relief defendant.
According to the first of the two complaints, United Kingdom citizen Timothy Page, a recidivist, and his son, U.K. resident Trevor Page, schemed with associates to acquire millions of shares in U.S. publicly traded microcap companies, disguise their control over the companies, and then dump their shares into the public markets in violation of the securities laws.
The Pages allegedly used nominee entities, including the five entity defendants, to conceal their holdings in the companies, and then engaged in manipulative trading and hired boiler rooms to generate artificial demand for their stock by making misleading statements to investors.
The SEC’s second complaint alleges that two of the Pages’ associates, Utah resident William R. Shupe and U.K. resident Daniel Cattlin, used their insider roles as officers or majority shareholders at several of the microcap companies to hide the Pages’ control. At the same time, they helped the Pages secretly acquire and then sell millions of the companies’ shares.
Shupe allegedly enabled the Pages to disguise their control over the companies by, among other things, holding the Pages’ securities through a company Shupe formed and by helping the Pages conceal their funding of the microcap companies. Cattlin is alleged to have coordinated with the Pages to provide false and misleading information in response to investigative subpoenas issued by the SEC staff, and during an interview conducted by SEC staff in June 2020.
“As we allege in the complaints, the defendants took elaborate steps to hide their fraudulent conduct,” said Paul Levenson, Director of the SEC’s Boston Regional Office. “We will continue to pursue bad actors, whether located in the U.S. or abroad, who engage in complex schemes to generate illicit profits at the expense of U.S. investors.”
The SEC’s complaints charge each of the nine defendants with violating the antifraud provisions of the federal securities laws. Timothy and Trevor Page and three of the entity defendants also are charged with violating the securities laws’ registration provisions, and Timothy and Trevor Page and one entity are charged with violating the securities laws’ reporting provisions.
Timothy Page and Trevor Page also are charged with violating the market manipulation provisions of the federal securities laws. Cattlin and Shupe are charged with aiding and abetting the Pages’ violations of the antifraud provisions of the securities laws. Timothy Page’s wife, Janan Page, is named as a relief defendant for her alleged receipt of illicit proceeds from the Pages’ fraudulent scheme.
In addition to seeking an order freezing the assets of Timothy, Trevor, and Janan Page and the five entity defendants, the SEC seeks permanent injunctions, disgorgement of ill-gotten gains plus interest, and civil penalties against all the defendants. The SEC also seeks penny stock bars against Trevor Page, Cattlin, and Shupe, conduct-based injunctions against the Pages, and officer and director bars against Cattlin and Shupe.
The SEC’s cases are being handled by Trevor Donelan, Kathleen Shields, Eric Forni, Rebecca Israel, David Scheffler, and Amy Gwiazda in the Boston Regional Office. The SEC appreciates the assistance of the Financial Industry Regulatory Authority, the British Columbia Securities Commission, the Royal Canadian Mounted Police, the Malta Financial Services Authority, the Mauritius Financial Services Commission, the Hong Kong Securities and Futures Commission, Magyar Nemzeti Bank (The Central Bank of Hungary), and the Monetary Authority of Singapore.