SEC Obtains Final Judgment Ordering Frederick Sharp to Pay $52,925,214
On Friday, May 12, 2022, the Securities and Exchange Commission announced that it obtained a final judgment against Canadian resident Frederick L. Sharp.
In August 2021, the SEC charged Sharp with leading a fraudulent scheme that generated hundreds of millions of dollars from unlawful stock sales and caused significant harm to retail investors in the United States and around the world. Among other relief, the judgment orders Sharp to pay over $50 million in monetary relief.
According to the SEC’s complaint, Sharp masterminded a complex scheme from 2011 to 2019 in which he and his associates enabled control persons of penny stock companies, whose stock was publicly traded in the U.S. securities markets, to conceal their control and ownership of huge amounts of penny stock and then surreptitiously dump the stock into the U.S. markets, in violation of federal securities laws.
The services Sharp and his associates allegedly provided included furnishing networks of offshore shell companies to conceal stock ownership, arranging stock transfers and money transmittals, and providing encrypted accounting and communications systems. According to the complaint, Sharp and his associates facilitated over a billion dollars in gross sales in hundreds of penny stock companies.
On May 12, 2022, the U.S. District Court for the District of Massachusetts entered the final judgment by default against Sharp. The judgment enjoins him from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, and the registration provisions of Section 5 of the Securities Act. The judgment also orders Sharp to pay disgorgement and prejudgment interest of $28,934,433 and a civil penalty of $23,990,781. It further imposes a penny stock bar and a conduct-based injunction restricting Sharp’s future trading in stocks.
The complaint filed against Sharp also links to several other SEC actions over the past several months that we also wrote about, including:
More Individuals Charged in Billion Dollar Penny Stock Pump and Dump/Money Laundering Operation
SEC Charges 15 Individuals in a $194 Million International Penny Stock Fraud
Undercover Sting Takes Down Francis Biller, Raymond Dove, and Chester Alvarez in Boiler Room Scheme
To speak with a Securities Attorney please contact Brenda Hamilton at 200 E Palmetto Rd, Suite 103, Boca Raton, Florida, (561) 416-8956, or by email at [email protected]. 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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