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SEC Charges Seven in Global Warming Pump-and-Dump Scheme
SEC ^ | 02/18/2011 | SEC

Posted on 02/21/2011 6:34:42 PM PST by RobertClark

FOR IMMEDIATE RELEASE 2011-46

Washington, D.C., Feb. 18, 2011 — The Securities and Exchange Commission today charged a group of seven individuals who perpetrated a fraudulent pump-and-dump scheme in the stock of a sham company that purported to provide products and services to fight global warming.

The SEC alleges that the group included stock promoters, traders, and a lawyer who wrote a fraudulent opinion letter. The scheme resulted in more than $7 million in illicit profits from sales of stock in CO2 Tech Ltd. at artificially inflated prices. Despite touting impressive business relationships and anti-global warming technology innovations, CO2 Tech did not have any significant assets or operations. The company was purportedly based in London, and its stock prices were quoted in the Pink Sheets.

According to the SEC’s complaint filed in U.S. District Court for the Southern District of Florida, the scheme was perpetrated through Red Sea Management Ltd., a Costa Rican asset protection company that laundered millions of dollars in illicit trading proceeds out of the United States on behalf of its clients. The U.S. Department of Justice today announced related criminal charges against six of the individuals.

“This group of illicit stock promoters sought to hide their scheme behind offshore entities, but their misconduct was exposed by the excellent cooperation of law enforcement agencies here and abroad,” said Cheryl Scarboro, Associate Director in the SEC’s Division of Enforcement.

According to the SEC’s complaint, the fraudulent pump-and-dump scheme in CO2 Tech stock occurred from late 2006 to April 2007 through the efforts of the following individuals:

* Jonathan R. Curshen, a Sarasota, Fla., resident who founded and led Red Sea.

* David C. Ricci and Ronny Morales Salazar of San Jose, Costa Rica, who were Red Sea stock traders.

* Ariav “Eric” Weinbaum and Yitzchak Zigdon of Israel, who were Red Sea clients.

* Robert L. Weidenbaum of Coral Gables, Fla., a stock promoter who operates a company called CLX & Associates.

* Michael S. Krome of Lake Grove, N.Y., a lawyer who allegedly wrote a fraudulent opinion letter.

The SEC’s complaint alleges that CO2 Tech falsely touted business relationships that the company had not formed, including a relationship with the Boeing Company. In fact, there were no communications, correspondence or understandings between CO2 Tech and Boeing.

The SEC alleges that Weinbaum and Zigdon initiated the pump-and-dump of CO2 Tech by utilizing the services of Krome, who issued a fraudulent opinion letter to enable them to have the restrictive legend removed from their CO2 Tech stock certificate. This provided them nearly full control over the freely tradeable shares of CO2 Tech stock. Weinbaum then hired Red Sea to sell massive quantities of CO2 Tech stock to the investing public through its web of nominee brokerage accounts. Zigdon caused the materially false and misleading information about CO2 Tech to be disseminated in press releases and on CO2 Tech’s website.

According to the SEC’s complaint, Weinbaum hired Weidenbaum to redistribute the false information through websites, spam e-mails and fax blasts. Weidenbaum enlisted a group of stock promoters who then executed illegal “matched orders” with Red Sea’s nominee brokerage accounts in order to “jump-start” the market and increase the price of the stock. As a result of the false media campaign and the illegal matched orders, the market price of CO2 Tech stock increased 81 percent increase in one day and trading volume increased 1,573 percent.

The SEC alleges that after Weinbaum hired Red Sea, he directed Red Sea stock traders Ricci and Salazar to sell the stock. Ricci and Salazar placed multiple layered orders to sell CO2 Tech stock – thereby creating the false appearance that the market for the stock was deeper than it actually was. This coordinated misconduct enabled stock sales at artificially inflated prices for profits of more than $7 million at the expense of unsuspecting investors.

The SEC’s complaint alleges that Curshen, Ricci, Salazar, Weinbaum, Zigdon, and Krome violated Section 5(a), (c) and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Weidenbaum is charged with aiding and abetting Weinbaum and Zigdon’s violations of Exchange Act 10(b) and Rule 10b-5. Without admitting or denying the allegations in the complaint, Ricci settled the SEC’s charges by agreeing to an injunction against future violations of these provisions and a penny stock bar.

In the related criminal action, charges brought by the Justice Department’s Criminal Division were unsealed against Curshen, Krome, Salazar, Weidenbaum, Weinbaum, and Zigdon. The defendants are charged in the Southern District of Florida variously with conspiracy to commit securities, mail and wire fraud; wire fraud; mail fraud; violating the securities regulation laws and obstruction of justice.

The SEC’s investigation was conducted by Deborah Tarasevich, Keith O’Donnell and John Lehmann, Jr. Richard Simpson will litigate the case. The SEC acknowledges the assistance of the Fraud Section of the Criminal Division of the U.S. Department of Justice, the Federal Bureau of Investigation, and the U.S. Postal Inspection Service. The SEC also acknowledges the assistance of the Financial Industry Regulatory Authority (FINRA) and several foreign law enforcement agencies that provided substantial support to the investigation, including the Costa Rican Police, British Columbia Securities Commission, Israel Securities Authority, United Kingdom Financial Services Authority, and The City of London Police.


TOPICS: Business/Economy; Crime/Corruption; Culture/Society; News/Current Events
KEYWORDS: carboncredits; carboncult; co2; co2tech; globalhoaxing; globalwarming; greenreligion; sec

1 posted on 02/21/2011 6:34:50 PM PST by RobertClark
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To: RobertClark

Just the tip of the iceberg in the GW/CC Fraudsters.


2 posted on 02/21/2011 6:38:08 PM PST by Marty62 (Marty 60)
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To: Ernest_at_the_Beach; Rurudyne; steelyourfaith; Tolerance Sucks Rocks; xcamel; AdmSmith; ...

Thanks RobertClark.


3 posted on 02/21/2011 6:38:35 PM PST by SunkenCiv (The 2nd Amendment follows right behind the 1st because some people are hard of hearing.)
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To: RobertClark

Just exactly how does this differ from those selling carbon absolutions and Al Gore’s carbon credit trading scam? Or those taking the $1 Billion in research money from Uncle Sam every year? A scam is a scam is a scam.


4 posted on 02/21/2011 6:39:22 PM PST by ProtectOurFreedom
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To: RobertClark

>> a sham company that purported to provide products and services to fight global warming.

Obviously, these guys were not blessed by the sanctimonious scumbags perpetrating the AGW lie.


5 posted on 02/21/2011 6:40:59 PM PST by Gene Eric (Your Hope has been redistributed. Here's your Change.)
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To: SunkenCiv; mmanager; Fiddlstix; Fractal Trader; FrPR; enough_idiocy; meyer; Normandy; Whenifhow; ...
Thanx SunkenCiv !

 


Beam me to Planet Gore !

6 posted on 02/21/2011 6:43:04 PM PST by steelyourfaith ("Eternal vigilance is the price of liberty." -- Wendell Phillips)
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To: RobertClark

And Gore and Obama get a “ stay out of jail free card”! Madoff is sitting in jail and and again the criminals in congress and this administration get a “stay out of jail free card” Do as I say not as I do, How is Rangle and Guietner still walking free but if you or I refuse to pay taxes we would be locked up.


7 posted on 02/21/2011 6:49:20 PM PST by ronnie raygun (V)
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To: ronnie raygun

Madoff would not be behind bars if he hadn’t turned himself in.


8 posted on 02/21/2011 6:53:14 PM PST by griswold3
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To: Marty62
Just the tip of the iceberg in the GW/CC Fraudsters.

Yep, and small potatoes compared to the Chicago stock exchange "carbon trading" scheme that was created to enrich numerous "connected" individuals. The "climategate" leaker has saved American taxpayers, present and future, countless trillions of dollars.

9 posted on 02/21/2011 6:58:19 PM PST by Lancey Howard
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To: griswold3
Madoff would not be behind bars if he hadn’t turned himself in.

Yep, and had he not turned himself in he would probably have been found in a landfill somewhere.

10 posted on 02/21/2011 7:02:12 PM PST by Lancey Howard
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To: griswold3
Madoff would not be behind bars if he hadn’t turned himself in.

Yep, and had he not turned himself in he would probably have been found in a landfill somewhere.

11 posted on 02/21/2011 7:02:37 PM PST by Lancey Howard
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To: RobertClark

This was just out and out fraud and happens with regard to lots of industries. The company was nothing more than a bank account and an articles of incorporation. The key was the bogus opinion letter. It was the sophisticated, Wall Street version of the Nigerian e-mail scam.


12 posted on 02/21/2011 7:03:53 PM PST by circlecity
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To: RobertClark

Wondering if this makes it all the way up to AlGore?


13 posted on 02/21/2011 7:05:56 PM PST by Road Warrior 04 (I miss President Bush greatly! Palin in 2012! 2012 - The End Of An Error! (Oathkeeper))
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To: Lancey Howard

Whoever he/she is they deserve our undying gratitude.


14 posted on 02/21/2011 7:32:54 PM PST by Marty62 (Marty 60)
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To: RobertClark

Wonder what kind of moron and how many bought the stock? Probably Euros or Euro wannabees trying to get in on the ground floor.


15 posted on 02/21/2011 8:02:23 PM PST by RetiredTexasVet (There's a pill for just about everything ... except stupid!)
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To: RobertClark
When they go after Algore we'll know they're serious.
16 posted on 02/21/2011 8:27:00 PM PST by E. Pluribus Unum ("If they bring a knife to the fight, we bring a gun." -- Barry Soetoro, June 11, 2008)
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To: RobertClark
a warmer and his money are soon parted...
17 posted on 02/21/2011 8:40:38 PM PST by Chode (American Hedonist - *DTOM* -ww- NO Pity for the LAZY)
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To: RobertClark

What, Gore was not one of them?! =.=


18 posted on 02/22/2011 5:24:14 AM PST by cranked
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