INCREDIBLE: Florida — Again: SEC Files Complaint Against Purported ‘Gold’ Mining Operation In Miami Known As Quri Resources And Its CEO, Jaime Santiago Gomez

BULLETIN: The SEC has gone to federal court in Florida to accuse Quri Resources Inc. and its Chief Executive Officer Jaime Santiago Gomez of operating a pump-and-dump scheme to drive up the price of Quri’s unregistered stock.

It was the second major action in Florida today against companies and individuals who allegedly were running stock-fraud schemes. Named defendants in a separate SEC case were Atlantis Technology Group and CEO Christopher Dubeau of Weston, Fla.

“Investors were duped into believing that Quri Resources was a successful mining company and that Atlantis Technology Group was selling cutting-edge technology services,” said Eric I. Bustillo, director of the SEC’s Miami Regional Office.

“Both companies misled investors with exaggerated claims while their respective senior executives illegally dumped shares into the market,” Bustillo said. “We will continue to crack down on companies that promote misleading information.”

The SEC said that Quri purported to be a “mining company headquartered in Miami, Florida, and operating in Ecuador.”

As was the case with Atlantis and Dubeau, Quri and Gomez were accused of issuing “a series of false press releases and other misleading public statements” as part of the scheme, the SEC charged.

From February to July 2009, Quri claimed in several press releases that, among other things:

  • It was ready to begin drilling on a mining project in Ecuador with a probable gold reserve worth over $1 billion.
  • It had signed letters of intent to acquire two valuable mining projects in Arizona.
  • It had acquired a second mining project in Ecuador and anticipated producing gold within three months.
  • It had signed a letter of intent to acquire a third valuable mining project in Ecuador.

“[A]t the same time, Quri’s website and other public statements described Quri as having ongoing operations, employees worldwide, and an impressive management team,” the SEC charged. “The complaint alleges that these claims were grossly misleading because, among other things:

  • The exact value of the gold reserves in Ecuador could not be known without further detailed exploration.
  • Quri never acquired any mining projects in Arizona, and it acquired, at most, only one project in Ecuador.
  • Quri never developed any of its purported mining projects and was never in a financial position to do so.
  • Quri had no money, was never able to raise any funds, had no reasonable expectation of any funding, and was heavily indebted.

The SEC said the scheme also involved the misuse of a website and a social-networking site.

“Gomez also authored Quri’s internet website and approved its profile on the social network website LinkedIn,” the agency alleged. “These falsely described Quri as having ongoing operations, 28 employees worldwide, a geologist with a PhD on staff, and an impressive management team led by Gomez, a college graduate. None of these claims were true.”

Gomez simply fleeced investors, the SEC charged.

“[T]aking advantage of Quri’s artificially inflated stock price, Gomez, through an entity he controlled, dumped over half a million shares of Quri stock on the unsuspecting public, selling Quri stock in unregistered transactions, earning at least $17,500 from the sale of the stock,” the SEC charged.

See earlier story about Atlantis.

Read the SEC complaint against Quri.

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One Response to “INCREDIBLE: Florida — Again: SEC Files Complaint Against Purported ‘Gold’ Mining Operation In Miami Known As Quri Resources And Its CEO, Jaime Santiago Gomez”

  1. Quick note: Now, it’s a Florida triple play for the SEC — although the case was filed in Illinois.

    This one alleges an insider trading-scheme that started with railroad employees in Florida:

    “Washington, D.C., Sept. 30, 2010 — The Securities and Exchange Commission today charged a pair of freight railway employees and four family members with perpetrating an insider trading scheme that garnered more than $1 million in illegal profits.

    “The SEC alleges that W. Gary Griffiths and Cliff M. Steffes learned confidential information in early 2007 about the upcoming acquisition of Florida East Coast Industries Inc. (FECI), which owned the freight railway where they worked in Jacksonville, Fla. Griffiths and Steffes tipped family members with the non-public information. The traders collectively purchased more than $1.6 million in company stock and options ahead of the May 8, 2007 announcement of the acquisition of FECI by an affiliate of Fortress Investment Group LLC.”

    “We allege these individuals exploited their personal and family relationships for monetary gain and that their misuse of confidential information gave them an illegal advantage over other traders in the market,” said Merri Jo Gillette, Director of the SEC’s Chicago Regional Office.

    According to the SEC’s complaint filed in U.S. District Court for the Northern District of Illinois, Griffiths is a resident of Elkton, Fla., and vice president and chief mechanical officer of Florida East Coast Railway. Steffes, who currently resides in Lisle, Ill., worked in the rail yard in Jacksonville when the insider trading scheme occurred.

    The SEC alleges that in the weeks leading up to the impending acquisition of FECI, the two men tipped Rex C. Steffes, who is Steffes’s father and Griffiths’s brother-in-law, with the confidential information. Also tipped were the two brothers of Cliff Steffes — Bret Steffes and Rex R. Steffes — and his uncle Robert J. Steffes. The insider trading scheme generated more than $1 million in illicit profits after the acquisition of the company was announced publicly.