SEC settles with Vancouver man for role in pump-and-dump scheme

A Vancouver man has settled charges brought by the U.S. Securities and Exchange Commission (SEC), which alleged that he carried out a secret pump-and-dump scheme in American penny stock.

The SEC announced that Joe Yiu Cheung, who lives in Vancouver and Hong Kong, has agreed to pay almost $800,000 USD and is to be banned permanently from dealing with penny stocks in order to settle allegations he violated securities laws by secretly taking a significant stake in a small oil and gas company and then funding a promotional campaign to artificially boost the company’s stock price before he dumped his shares.

Cheung settled the case without admitting or denying the findings in SEC’s order. To settle the case he agreed to cease and desist from further violations, to pay a number of fines and he agreed to a penny stock ban and a 10-year officer-and-director ban.

A pump-and-dump scheme attempts to boost the price of a stock through recommendations based on false, misleading or greatly exaggerated statements. The perpetrators of this scheme, who already have an established position in the company’s stock, sell their positions after the hype has led to a higher share price.

Read more at Investment Executive

This article is summarized by Canadian Fraud News Inc.

Kayla Kuefler is the head writer and social media producer at Canadian Fraud News. Kayla was born-and-raised in Edmonton, Alberta and moved to Toronto in 2013 to pursue her Bachelor of Journalism at Ryerson University. Kayla has previously interned at Global News Edmonton, Global News Toronto and CBC News in London, England.

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