SEC Charges California Resident in Microcap Fraud Scheme Targeting Retail Investors
- Written by Newsfile
Washington, D.C.--(Newsfile Corp. - July 22, 2021) - The Securities and Exchange Commission today announced that it has filed an emergency action charging California resident Charlie Abujudeh with running microcap fraud schemes targeting retail investors.
According to the SEC’s complaint filed today in U.S. District Court for the Eastern District of New York, Abujudeh worked with others from August 2019 to at least September 2020 to fraudulently sell several microcap companies’ stock to investors by making misleading statements during high pressure sales calls and/or email promotions. The SEC alleges that, as part of the scheme, Abujudeh and his associates convinced investors to invest in the stock of Odyssey Group International Inc. as well as other microcap companies including Scepter Holdings Inc. and CannaPharmaRx Inc. Abujudeh paid stock promoters to tout Odyssey stock over the phone to unsuspecting retail investors who were recruited through false and misleading representations. Abujudeh also allegedly paid for email promotional campaigns and schemed to hide his control over and simultaneous sale of Odyssey, Scepter, and CannaPharmaRx stock into the increased demand that the promotions he paid for had generated. According to the complaint, Abujudeh generated over $9 million in illicit proceeds by selling Odyssey, Scepter, and CannaPharmaRx stock to investors during the promotions he funded. The SEC alleges that Abujudeh funneled hundreds of thousands of dollars of the illegal Odyssey stock sale proceeds to an Odyssey insider with whom he had been coordinating.
“We have charged that Abujudeh’s schemes harmed investors,” said Paul Levenson, Director of the SEC’s Boston Regional Office. “All investors should educate themselves before investing and be particularly cautious when faced with unsolicited calls, high-pressure sales tactics, and promotional email blasts.”
The SEC’s complaint charges Abujudeh with violating the antifraud and registration provisions of the federal securities laws. The SEC is seeking an order freezing the defendant’s assets, permanent injunctions, the return of allegedly ill-gotten gains with prejudgment interest, civil penalties, a penny stock bar, and an officer and director bar.
Investors can find additional information about pump-and-dump scams[1], including the warning signs of fraud, on Investor.gov[2]. The Office of Investor Education and Advocacy and Enforcement's Retail Strategy Task Force have issued Investor Alerts about these types of fraud, including Frauds Targeting Main Street Investors -- Investor Alert[3], Investor Alert: Fraudulent Stock Promotions[4], Investor Alert: Don’t Invite Investment Scams to Find You[5], and Investor Alert: Beware of Stock Recommendations on Investment Research Websites[6].
The SEC’s investigation was conducted by Nita Klunder, Trevor Donelan, David D’Addio, and Paul Block of the Boston Regional Office. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.
References
- ^ pump-and-dump scams (www.newsfilecorp.com)
- ^ Investor.gov (www.newsfilecorp.com)
- ^ Frauds Targeting Main Street Investors -- Investor Alert (www.newsfilecorp.com)
- ^ Investor Alert: Fraudulent Stock Promotions (www.newsfilecorp.com)
- ^ Investor Alert: Don’t Invite Investment Scams to Find You (www.newsfilecorp.com)
- ^ Investor Alert: Beware of Stock Recommendations on Investment Research Websites (www.newsfilecorp.com)