(HedgeCo.Net) The Securities and Exchange Commission has charged California-based Global Wholehealth Partners Corp., its CEO, and four penny stock promoters with conducting a $1.95 million fraudulent pump-and-dump scheme through a series of false and misleading statements in press releases and SEC filings, including false assertions about Global Wholehealth’s purported emergency use authorization submissions for COVID-19 tests.

The SEC alleges that, beginning in June 2020, Global Wholehealth’s CEO, California resident Charles Strongo, prepared press releases and signed reports filed with the SEC, falsely claiming that Global Wholehealth had pending requests for emergency use authorizations with the U.S. Food and Drug Administration for three COVID-19 tests. According to the complaint, at the same time, California resident and recidivist Brian M. Volmer, Florida resident and recidivist Joshua Yafa, Florida resident Jamie M. Yafa, and Empire Associates, Inc., a stock promotion firm operated by Joshua and Jamie Yafa, carried out a promotional campaign to boost Global Wholehealth’s stock price. The scheme allegedly included newsletter email blasts, stock research reports, and a phone room, all urging investors to purchase Global Wholehealth stock. As alleged, the newsletters did not disclose that Global Wholehealth had compensated Empire Associates with 75,000 Global Wholehealth shares to implement a market awareness campaign and instead claimed that an unspecified third party had paid Empire Associates for the newsletters. The complaint further alleges that the newsletters did not disclose that the defendants intended to sell their Global Wholehealth shares from the outset, and instead misleadingly stated only that the unspecified third party and Empire Associates may sell their shares. In fact, the SEC claims that the defendants unloaded their shares on the OTC market as the promotional campaign progressed for a total of about $1.95 million in illicit proceeds.

In a parallel action, the United States Attorney’s Office for the Southern District of California announced criminal charges.

The SEC’s complaint, filed in the U.S. District Court for the Southern District of California, charges all defendants with violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and charges Strongo, Volmer, the Yafas, and Empire Associates with violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933. The complaint also charges the Yafas and Empire Associates with violations of Section 17(b) of the Securities Act for nondisclosure of their compensation for touting Global Wholehealth’s securities. The SEC seeks permanent injunctions and civil penalties against all defendants and disgorgement with prejudgment interest against Strongo, Volmer, the Yafas, and Empire Associates. The complaint also seeks an officer-and-director bar against Strongo and penny stock bars against Strongo, Volmer, Jamie Yafa, and Empire Associates.