Prosecutors in NYC indict 8 in stock fraud case
NEW YORK (AP) — New York City prosecutors have indicted eight people they say operated a penny stock "pump and dump" scheme that defrauded $290 million from thousands of investors.
Four of them were arraigned Thursday in state Supreme Court in Manhattan on an 85-count indictment alleging securities fraud and other charges. They all pleaded not guilty.
Prosecutors alleged the defendants manipulated the markets and cashed their shares before the stocks plummeted.
They said Anthony Thompson of Bethesda, Maryland and others promoted the stocks through emails blasts from websites they controlled.
Attorney Maratha Fritz said the 38-year-old Thompson made clear he was a paid advertiser of the stock, not a boiler room broker.
Fritz said Thompson has already settled a Securities and Exchange Commission case in Florida.
He was released on $1 million bond.