SEC charges stock promoters in broker bribe scheme
WASHINGTON, Sept 11 (Reuters) - Two stock promoters have been charged with market manipulation in a broker bribery scheme involving an undercover FBI agent, the U.S. Securities and Exchange Commission said on Thursday.
The SEC said Bruce Grossman and Jonathan Curshen attempted to manipulate the stock of Industrial Biotechnology Corp, a Sarasota, Florida-based company that trades on the pink sheets at around $1.
Grossman and Curshen engaged in a kickback arrangement beginning in at least June with an individual who claimed to represent a group of registered representatives with trading discretion over the accounts of wealthy customers, the SEC said. The individual was actually an undercover FBI agent.
The SEC said the stock promoters promised to pay a 25 percent kickback to the agent and the registered representatives in exchange for the purchase of up to $3 million of Industrial Biotechnology's stock through the customers' accounts.
The SEC charged that Grossman and Curshen paid almost $19,000 in bribes to the agent and instructed him to buy about 85,000 shares of Industrial Biotechnology stock for about $76,000 through matched trades.
U.S. regulators have been cracking down on market manipulation and the spreading of false rumors. In April the SEC settled with a Wall Street trader accused of intentionally spreading false rumors about a new lower price of a deal to buy Alliance Data Systems Corp (ADS.N) while selling the stock short.
In the case against Grossman and Curshen, the SEC is seeking civil penalties, disgorgement of any ill-gotten gains, and an order prohibiting their participation in any penny stock offerings.
Attorneys for Grossman and Curshen did not immediately return calls seeking comment. (Reporting by Karey Wutkowski; Editing by Gary Hill)
