(HedgeCo.Net) The Securities and Exchange Commission has charged Canadian citizen Bradley Moynes and Canadian corporation Digatrade Financial Corp. for engaging in a deceptive scheme involving microcap companies that generated more than $1.5 million in unlawful stock sale proceeds at the expense of unsuspecting retail investors.
The SEC’s complaint alleges that Moynes was the President, CEO and Director of two small and thinly traded companies, Formcap Corporation and Digatrade, whose stock was publicly traded in the U.S. securities markets. According to the complaint, Moynes used foreign nominee companies to hold stock in these microcap companies, thus concealing his ownership. The complaint alleges that he and his associates generated demand for his stock by paying promoters to tout the stock and then secretly sold his stock into that demand, generating substantial illicit profits from unsuspecting investors.
Moynes allegedly violated the U.S. securities laws because he defrauded investors by concealing information about his ownership and control over the stock he was selling. Moynes allegedly signed numerous filings with the SEC that contained misstatements about his ownership of Digatrade shares. Moynes allegedly misled investors, brokers, and transfer agents (companies that maintain records of stock ownership) in order to convince these parties that his stock shares were eligible for trading in the public markets. The complaint alleges that, as a result of Moynes’ deceptive conduct, investors buying the stock he sold were deprived of important information-that the stock they purchased was being dumped by the President and majority shareholder of the company.
The SEC’s complaint, filed in the United States District Court for District of Massachusetts, charges Moynes and Digatrade with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks permanent injunctions, disgorgement jointly and severally of allegedly ill-gotten gains plus prejudgment interest, civil penalties and a penny stock bar against the Defendants. The complaint also seeks an officer-and-director bar against Moynes. The complaint additionally charges Vancap Ventures, Inc., a Canadian company that Moynes owned, as a relief defendant because it allegedly received illicit proceeds from Moynes’ fraudulent scheme, and the SEC seeks disgorgement of those proceeds.