SEC Charges James P. Anglim in Connection with Fraudulent Scheme to Manipulate Stock Prices
On Monday, July 17, 2023, the Securities and Exchange Commission (the “SEC”) charged New Jersey resident and former broker-dealer registered representative, James P. Anglim, for engaging in multiple deceptive and manipulative schemes to assist various people who controlled large blocks of public company stock (“Control Persons”) to sell that stock to investors in companies traded on the over-the-counter (or “OTC”) markets while concealing that they were behind those sales.
According to the SEC complaint, from November 2016 to February 2022, while Anglim was employed as a registered representative of two different United States-based brokerage firms that engaged in “market making” activities, Anglim abused his position as a trader to facilitate the illegal sale of stock into the public markets by several Control Persons in at least five different public companies.
FINRA broker records show that from 2016 – 2019, Anglim worked for Spartan Securities Group Ltd., and from 2019 – 2022, Anglim worked for Paulson Investment Company LLC.
According to the SEC, Anglim’s conduct helped the Control Persons to dump large quantities of stock into the public markets while concealing that they were the source of all of those sales, thus avoiding disclosure requirements imposed by the federal securities laws.
The Control Persons were not customers of the brokerage firms where Anglim was employed. Nonetheless, Anglim entered into repeated arrangements with several Control Persons whereby: 1) the Control Persons would tell Anglim they wanted to sell a particular company’s stock, how much they wanted to sell, and often at what prices they wanted to sell; 2) Anglim would use his position as a trader at a market maker firm to sell short the shares of that company’s stock, at prices directed by the Control Persons; and 3) Anglim would cover his short positions in that company’s stock by arranging with the Control Persons to purchase shares of that company’s stock from them — often at pre-arranged prices.
On behalf of Control Persons, Anglim engaged in at least $53.85 million of trading in the securities of at least the following companies: Proto Script Pharmaceutical Corp., Digatrade Financial Corp., 12 Retech Corp., Homie Recipes Inc. (now Stevva Corp) and Charlestowne Premium Beverages, Inc.
Last August, Joseph Padilla was arrested and charged for his role in the Charlestown Premium Beverages Inc scheme. And last month, Padilla was charged by the SEC for his role in stock manipulation schemes involving Charlestown Premium Beverages Inc, CGS International, Inc., GBX International Group, Inc, Oncology Pharma, Inc, SUIC Worldwide Holdings Ltd. (also known as Sino United Worldwide Consolidated Ltd) and Xtreme Fighting Championships, Inc. Anglim was referenced in that SEC Complaint as “Trader A”.
In June of 2022, the SEC charged Bradley Moynes for his role in the Digatrade Financial Corp scheme. In that Complaint, the SEC said that Moynes used the services of Frederick L Sharp and his employees (“the Sharp Group”) to facilitate each step of his fraud. The Sharp Group operators were sued by the SEC on August 5, 2021 (see U.S. v Sharp, et. al., 1:21-mj-07182-JCB). The SEC’s complaint further alleges that in mid-2016, Luis Carrillo had become involved in the Digatrade Financial Corp scheme and worked directly with Moynes to orchestrate the scheme. Carrillo’s role allegedly included coordinating the promotion and directing trading in Digatrade Financial Corp stock. Luis Carrillo was charged by the SEC for his conduct associated with numerous microcap schemes in August 2021 (see SEC v. Carrillo, et al., Civil Action No. 21-cv-11272).
In March of 2022, Francis Biller, Raymond Dove, and Chester Alvarez were charged by the SEC for running a boiler room based in Medellin, Colombia (See SEC v Biller, et al., No. 22-cv-1406). According to the SEC, this boiler room group was used to promote several public companies, including Proto Script Pharmaceutical Corp and Digatrade Financial Corp under the direction of Luis Carrillo.
Our researcher concluded that Roger Knox was likely a cooperating individual in the litigation against Joseph Padilla, Frederick Sharp, Luis Carrillo, and their accomplices. Knox was criminally charged on September 17, 2018, and arrested on October 3, 2018.
Without admitting or denying the SEC’s allegations, Anglim has consented to the entry of a final judgment that permanently enjoins him from violating Section 17(a) of the Securities Act of 1933 and Sections 9(a) and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; orders him to pay disgorgement of $405,991, representing his trading profits, and $82,009 in prejudgment interest, and imposes a penny stock bar against Anglim. Based on his cooperation with the Commission’s investigation, the Commission determined not to seek a civil penalty in its settlement with Anglim and has asked the court not to impose a penalty. The settlement is subject to court approval.
To speak with a Securities Attorney about penny stock bars, 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.
Hamilton & Associates | Securities Attorneys
Brenda Hamilton, Securities Attorney
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