SEC CHARGES RECIDIVIST IN INTERNATIONAL MANIPULATION
The Commission charged recidivist securities law violator Nicholas Geranio and others with running a complex international manipulation and boiler room operation for over two years which fleeced investors out of over $35 million. SEC v. Gerandio (C.D. Cal. Filed May 16, 2012). Mr. Geranio was enjoined in an earlier Commission action, SEC v. Geranio, Civil Action No. 99-4702 (C.D. Cal. July 7, 1999). Also named as defendants are Keith Field, Mr. Geranioâ€™s long time business partner and two controlled entities, The Good One, Inc. and Kaleidoscope Real Estate, Inc.
Mr. Geranio, working through The Good One and Kaleidoscope to stay behind the scenes, created and controlled the international manipulation scheme. It was implemented in a series of steps:
First, eight U.S. shell companies were located;
Second, Mr. Field prepared misleading business plans, marketing materials and websites for each issuer;
Third, management was installed in each entity which included Mr. Field;
Fourth, the shares of each issuer were manipulated under the tutelage of Mr. Geranio using matched orders and wash sales to maintain the share price of each issuer;
Fifth , boiler room teams based in Spain were recruited who raised $35 million selling Regulation S stock using high pressure tactics primarily to residents of the U.K. who were told they were purchasing the shares at a discount to the then existing market price without disclosing that the price had been manipulated;
Sixth, payment for the Regulation S shares was forwarded to agents in the U.S. who divided the money among the scheme participants.
The complaint alleges violations of Securities Act Sections 17(a) and Section 10(b). The case is in litigation.