The SEC announced administrative proceedings against Windsor Street Capital and John D. Telfer, the firm’s former anti-money laundering officer. The commission alleges that the firm failed to file Suspicious Activity Reports for $24.8 million worth of suspect transactions, which includes transactions in accounts controlled by Raymond H. Barton and William G. Goode who the SEC charged individually with operating a pump-and-dump scheme.

In pump-and-dump schemes, people holdings stock try to inflate the price of that stock, many times via false or misleading statements or other announcements. After investors hurry to purchase the stock because on this misinformation, the operators of the scheme dump the stock. This causes the stock’s price to drop, and investors who bought the stock during the rush end up losing money.

The SEC claims that Windsor Street Capital and Telfer should have been aware of the suspect circumstances underlying a number of transactions within client accounts. The commission further claims clients, such as Barton and Goode, deposited large blocks of penny stocks, liquidated them typically amid substantial promotional activity, and then moved the proceeds away from the firm. Additionally, the shares deposited by Barton and Goode could not be sold legally because no registration statement was in effect and no registration exemption was available, according to the SEC. Instead of investigating the deposits, Windsor Street Capital accepted registration exemption claims by the clients at their word.

The SEC also filed a complaint against Barton and Goode, as well as Matthew C. Briggs, Kenneth Manzo and Justin Sindelman. The suit claims they engaged in a pump-and-dump scheme that obtained shares of dormant shell companies purportedly in the dietary supplement business, falsely spread news and products arising from the businesses, and dumped the shares on the market for people to purchase at inflated purchases.

 

The Frankowski Firm has years of experience helping investors recoup their lost funds. If you or someone you know has lost money as a result of such a scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.