The US Securities and Exchange Commission announced that six people have been charged in an international microcap fraud scheme.
The scheme allegedly generated $35 million of illegal sales of stock in at least 45 microcap companies.
Those charged include Steve Bajic and Rajesh Tenaja who helped shareholders secretly dump large quantities of the illegal stock sales.
Kenneth Ciapala, Anthony Killarney are alleged to have coordinated the sales with Swiss company Blacklight.
Christopher McKnight and Aaron Wise are alleged to have fraudulently transferred, and hid the source of, funds used to promote several of the microcap stocks.
An SEC complaint alleges that Ciapala and Blacklight facilitated the sale in millions of unregistered shares of EMS Find Inc so that the microcap's stock price was artificially inflated and then dumped into the market.
In a parallel action, the US Attorney's Office for the Southern District of New York announced criminal charges against Ciapala and Blacklight.
"As we allege in the complaints, the defendants evaded the securities registration requirements and engaged in other manipulative conduct, including by disguising the true sellers of securities, to defraud investors and generate illicit profits for themselves," said Marc Berger, director of the SEC's New York Regional Office.
"We will continue to pursue individuals and entities, whether located domestically or abroad, who undertake complex schemes to hide their fraudulent conduct."
Bajic, Taneja, Killarney, Ciapala, and their companies have been charged with violating the antifraud and registration provisions of US federal securities laws and with acting as unregistered broker-dealers.
McKnight and Wise were charged with aiding and abetting the fraudulent stock sales and McKnight was also charged with violating an antifraud provision of the federal securities laws.
The SEC is seeking permanent injunctions, disgorgement of allegedly ill-gotten gains plus interest, penalties, and penny stock bars.