July 4 The U.S. Securities and Exchange
Commission has reached a settlement with a Montreal man it
accused of fraud, barring the man from any future offerings of
so-called penny stocks.
John Babikian will also pay a total of $3.73 million and be
prohibited from recommending that investors buy any U.S.
publicly traded stock unless he discloses at the same time any
plans to sell the stock within 14 days, according to documents
filed with U.S. District Court on Wednesday.
The agreement, which was not yet signed by a judge, does not
require Babikian to admit guilt.
The SEC accused Babikian of reaping an illegal $1.9 million
profit by selling nearly 1.4 million shares of coal mining
company America West Resources Inc after his emailed
touts had boosted their price.
The SEC said Babikian sent the touts on Feb. 23, 2012, to
about 700,000 email addresses through the AwesomePennyStocks.com
and PennyStocksUniverse.com websites.
As other investors bought the stock and drove up the price,
he sold his holdings at an average price more than quadruple the
level where it had traded previously, the SEC said.
America West is not a defendant in the SEC case and was not
accused of wrongdoing.
The case is SEC v. Babikian, U.S. District Court, Southern
District of New York, No. 14-01740.
(Reporting by Luciana Lopez and Jonathan Stempel; Editing by