SEC Charges Brian Sodi, the Penny Stock “Mailman” With Scalping Investors In Gold Mining Stocks
The Securities and Exchange Commission has charged Brian Sodi, a penny stock promoter based in Florida with defrauding investors in a pair of gold mining stocks by secretly amassing shares before touting the companies publicly. He allegedly sold the bulk of his stock and reaped more than $1.1 million in illicit profits after his promotions caused the share prices and trading volumes to skyrocket.
The SEC’s complaint alleges that Brian Sodi, known in penny stock circles as “Mailman” for his pervasive participation in direct-mailed penny stock promotions, committed a fraud known as scalping. He allegedly disseminated promotions recommending the purchase of the stocks in Southern USA Resources Inc. and Goff Corporation without disclosing he owned shares and planned to sell them through a foreign bank. Sodi also allegedly hid from investors that he was being paid in stock for one of these promotions. According to the SEC’s complaint, Brian Sodi proceeded to unload hundreds of thousands of his own shares to the detriment of other investors who bought in to the hype. The unlawful practice of promoting a stock while secretly selling is known as scalping.
“Everyday investors are the unwitting targets of scalping schemes, and we’re here to fight back for them,” said Melissa Hodgman, Associate Director in the SEC’s Enforcement Division. “As alleged in our complaint, Sodi deviously used a foreign bank account not in his name in an effort to go undetected, but he failed to hide his illicit trading from us.”
Criminal charges against Brian Sodi were unsealed in a parallel action filed by the U.S. Attorney’s Office for the Northern District of Alabama.
The SEC’s complaint against Brian Sodi filed February 26 charges Sodi and two of his publishing houses, Capital Financial Media LLC and List Data Solutions LLC, with violating Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 and Sections 17(a) and (b) of the Securities Act of 1933. The complaint also charges Sodi with violating Section 13(d) of the Exchange Act and Rule 13d-1 as well as Sections 5(a) and (c) of the Securities Act. Among other things, the complaint seeks an accounting of all of Sodi’s and his entities’ sales of all U.S. penny stocks that Sodi’s platform promoted within the last five years.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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Brenda Hamilton, Securities Attorney
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