BULLETIN: Now, A Multimillion-Dollar ‘Penny-Stock’ Scheme Operating On Facebook, Twitter; SEC Charges Two Canadians In ‘Scalping Scam’

UPDATED 1:58 P.M. EDT (U.S.A.) The SEC has obtained an emergency order to freeze the assets of two Montreal residents, alleging they were pushing a penny-stock scheme through their website and on Facebook and Twitter.

Named defendants in the alleged scheme were Carol McKeown and Daniel F. Ryan, whom the SEC described as a Canadian “couple.” The agency said it worked with the Quebec Autorité des marchés financiers (AMF), which also has obtained an emergency freeze, along with a “cease trade order.”

The stocks were touted through a website known as PennyStockChaser.com, the SEC said. McKeown is 44; Ryan’s age was not immediately known.

“As alleged in our complaint, McKeown and Ryan used all the modern methods to communicate with investors including the PennyStockChaser website, e-mail, text messages, Facebook, and Twitter yet failed to adequately communicate that their rosy predictions for touted stocks were accompanied by their sales of those very same stocks,” said Eric I. Bustillo, director of the SEC’s Miami Regional Office.

The U.S. complaint is filed in U.S. District Court for the Southern District of Florida.

McKeown and Ryan received millions of shares of touted companies through two corporations — Downshire Capital Inc. and Meadow Vista Financial Corp. — which also were named defendants, the SEC said.

Both McKeown and Ryan were compensated for pumping the stock, while “PennyStockChaser simultaneously predicted massive price increases for the issuers, a practice known as ‘scalping,'” the SEC charged.

“McKeown, Ryan and one of their corporations failed to disclose the full amount of the compensation they received for touting stocks on PennyStockChaser,” the SEC charged, saying that the couple and their corporations “have realized at least $2.4 million in sales proceeds from their scalping scheme.”

The PennyStockChaser website was throwing a server error at the time of this post. Meanwhile, the Twitter site appeared to be locked. The Facebook site appeared to be operational, with a posted dated Sunday that blared, “How many newsletters put their money where their mouth is? PSC will be buying another 500,000 shares on Monday.”

It was not immediately clear what stock the Facebook site was pumping Sunday because the link led to a page on the PennyStockChaser site that generated a server error.

It has become somewhat common for scammers to use social-networking sites to hawk investment-fraud schemes and murky businesses. Some fraudsters even have claimed that the so-called autosurf “industry” in which purported “advertisers” get paid for viewing websites is a new form of social networking and that the autosurf sites are building on the success of brands such as Twitter, Facebook and others.

Read the SEC complaint to see the names of some of the other stocks the agency says the defendants recently have pumped.

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5 Responses to “BULLETIN: Now, A Multimillion-Dollar ‘Penny-Stock’ Scheme Operating On Facebook, Twitter; SEC Charges Two Canadians In ‘Scalping Scam’”

  1. Penny Stock Chaser was at one time a major advertiser on CNBC and other mainstream media outlets, I can hear the jingle in my head now…..

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  2. The Miami office of the SEC accomplished this in 6 months. The Quebec regulators have been probing Mr. Ryan and his associates for over 3 years.

    Hate to be jingoistic but…if you want a real cop, call the SEC.

    Pages 12 and 13 of the complaint explain a lot. There’s a US reporter/blogger (Melissa Davis) who deserves a little credit (at least from fellow bloggers).

    Her website is:

    http://www.thestreetsweeper.org

    Check out her story on the 2 companies mentioned on pages 12 and 13 of the SEC complaint if you wish. Too bad there’s not an SEC office in Oklahoma City.

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  3. Have you seen John Bell at Hack the stock market ? He is currently promoting JAMN – Jamming coffee. He advertises heavily on Yahoo and then sends 2-3 picks per year to his investors. He claims to send the pick at the same time to all the investors yet he sends the pick to investors at different times so it is not so good to get the stock pick in March when the earlier investors has received the stock pick in February when the stock was trading at a much lower price. He does not disclose this rather he makes you think that you just received this hot stock pick. What a scam

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  4. none: Have you seen John Bell at Hack the stock market ? He is currently promoting JAMN – Jamming coffee. He advertises heavily on Yahoo and then sends 2-3 picks per year to his investors.He claims to send the pick at the same time to all the investors yet he sends the pick to investors at different times so it is not so good to get the stock pick in March when the earlier investors has received the stock pick in February when the stock was trading at a much lower price. He does not disclose this rather he makes you think that you just received this hot stock pick.What a scam

    That is true. He release his pick (JAMN) in Feb when it was at about $0.60 to some and then on March 2 to others when it was at $0.90. All the while saying to each one that they were the first to get it. My friend got the alert in Feb and I (with the same PAID subscription) got the alert in March. How to Hack the Stock Market email list is a stock pumping scam!

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