washingtonpost.com on December 2, 2011 reported that federal authorities suspended trading by seven firms and filed criminal charges Thursday against corporate executives, lawyers and stock promoters who allegedly used fraud to spur investments in small companies known as penny stocks. deral action was the latest is a yearlong investigation by the U.S. Attorney’s Office in Boston to prevent fraud in stock markets for small publicly traded companies. Penny stocks are traded over the counter rather than on a major exchange. The criminal case filed in U.S. District Court named 13 defendants from 10 states, accused of agreeing to pay kickbacks to an undercover FBI agent they believed was an investment fund representative in exchange for having his purported firm buy stock in certain companies. Most of those named face charges of mail fraud, wire fraud, and conspiracy to commit securities fraud. In conjunction with the criminal case, the Securities and Exchange Commission suspended seven firms that allegedly participated in the kickback-for-investment scheme. Also, the SEC filed a lawsuit against four people the commission says engaged in securities fraud by using kickbacks to manipulate trading in “microcap,” or penny stocks. The seven firms suspended were: 1st Global Financial Inc. of Las Vegas, Augrid Global Holdings Corp. of Houston, ComCam International Inc. of West Chester, Pa., MicroHoldings US Inc. of Vancouver, Wash., Outfront Companies based in Florida, Symbollon Corp./Symbollon Pharmaceuticals Inc. of Medfield, Mass., and ZipGlobal Holdings Inc. of Hingham, Mass. When asked for comment, Outfront Companies CEO Kevin Todd said he was trying to reach the SEC “to find out what’s going on.
The original article can be found at washingtonpost.com.