Posted Jul 18, 2014 03:32 pm CDT
A corporate lawyer in Nevada is among seven defendants federally indicted Thursday in Brooklyn, New York, in a claimed “pump-and-dump” scheme involving microcap stock.
Attorney Kyleen Cane is accused of playing a role in an alleged plan to artificially inflate the share price in the stock of a company known as Cubed, according to the Wall Street Journal (sub. req.).
A FBI press release provides additional details about Cane, who is accused of working with other defendants to orchestrate so-called match trades and wash trades that would slowly inflate the price of the stock in a seemingly legitimate manner.
“The defendants used an escrow account maintained by Cane to successfully control the price and volume of Cubed’s stock,” the release states.
Among the evidence cited by the government in the case is a cellphone call made in May by co-defendant Abraxas “A.J.” Discala, 43. He is the CEO of OmniView Capital Advisors LLC, a Connecticut company that bills itself as a merchant banking firm, the Wall Street Journal reports.
During the call, Discala allegedly said, referring to the use of Cane’s escrow account, “I’m the f—— brake and the gas, jackass. If I take my foot off the brake it’s 55 [dollars] tomorrow.” His comment was followed by laughter, the FBI says.
Attorney Joseph Tacopina represents Discala. He told the Wall Street Journal the allegations will be vigorously defended. Cubed lawyer Ira Sorkin told the Wall Street Journal that “if called upon, we intend to fully cooperate with the authorities.”
The feds have recently been involved in a flurry of enforcement actions concerning microcap stock and in some cases have been using tactics—like undercover stings—that typically have been reserved for organized crime, the Wall Street Journal says.
ABAJournal.com: “Unprecedented Era of Insider-Trading Enforcement Casts a Wide Net, With Help of Electronic Evidence”