SEC Obtains Judgment Against Florida Man in Microcap Fraud

(HedgeCo.Net) The U.S. District Court in Boston entered a final judgment by consent against Florida resident Todd Zinkwich, whom the SEC charged for engaging in a scheme to manipulate the market for numerous microcap stocks. The District Court had previously entered a partial judgment against Zinkwich, imposing multiple injunctions against him.

According to the SEC’s complaint, from at least June 2017 to March 2018, individuals and groups who held large quantities of microcap stocks paid Zinkwich hundreds of thousands of dollars to facilitate a scheme to drive up demand for the stocks of certain issuers. As alleged in the complaint, Zinkwich arranged for his associate Eric Landis to generate an appearance of increased demand for the stocks by placing thousands of trades between numerous accounts under Landis’s control, including accounts that Zinkwich controlled and gave Landis access to. The Commission separately charged and obtained a final judgment against Landis for his role in the fraud. In the complaints against Zinkwich and Landis, the SEC alleged that the manipulative trading scheme generated the false appearance of an upsurge of trading in the companies’ stock and allowed Zinkwich’s clients to sell millions of shares of stock into the public market at inflated prices.

Zinkwich has consented to a final judgment that permanently enjoins him from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and the market manipulation and antifraud provisions of Sections 9(a) and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and from participating in any offering of penny stock. The final judgment also orders Zinkwich to pay over $300,000 in disgorgement and prejudgment interest, and based on Zinkwich’s financial condition waives payment except $12,000.

Modified: January 17, 2023

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