HD View 360 CEO Charged With Stock Manipulationbr>
The US Securities and Exchange Commission (SEC) has filed securities fraud charges against UK broker Beaufort Securities and several of its staff in connection with manipulative trading in the securities of HD View 360, a Florida-based CCTV company.
The SEC also filed fraud charges against HD View’s CEO, another individual, and three entities they control for manipulating HD View’s securities as well as the securities of another microcap issuer, West Coast Ventures Group Corp.
HD View 360 recently announced its plans to explore and implement blockchain technology. The company said that by providing blockchain technology, their B2B and B2C customers will be able to process secure transactions anonymously.
The charges stemmed in part from an undercover FBI operation. The SEC said the scheme involved an undercover FBI agent who described his business as manipulating US stocks through pump-and-dump schemes. Beaufort’s investment manager Peter Kyriacou and the agent discussed depositing large blocks of microcap stock in Beaufort accounts, driving up the price of the stock through promotions. Kyriacou and the agent are said to have agreed to manipulate the share price of HD View 360 through matched trades, and then sell the shares for a large profit.
The complaint against Beaufort and Kyriacou alleges that they opened brokerage accounts for the undercover agent in the names of nominees in order to conceal his identity and his connection to the anticipated trading activity in the accounts. The SEC also alleges that the defendants suggested that the undercover agent could create the false appearance that HD View’s stock was liquid in advance of a pump-and-dump by “gaming the market” through matched trades.
“We allege that Kyriacou engaged in a scheme to manipulate the market of HD View stock by matching trades to create a false appearance of liquidity for unwitting investors,” said Marc P. Berger, Regional Director of the SEC’s New York office. “The SEC and its law enforcement partners will continue to aggressively work together to root out such manipulation, wherever the alleged perpetrators and their brokerage firms reside, and despite their best efforts to conceal and disguise their methods.”
According to the US Department of Justice, Beaufort facilitated ten such schemes between 2014 and 2018. Kyriacou and several others also offered to launder $9.3 million which they believed to be the proceeds of securities fraud for the undercover agent, using the purchase and sale of art — including a Pablo Picasso painting.
“The defendants engaged in an elaborate multiyear scheme to defraud the investing public of millions of dollars through deceit and manipulative stock trading, and then worked to launder the fraudulent proceeds through offshore bank accounts and the art world,” said US attorney Richard Donoghue.
A second complaint filed by the SEC in the US District Court for the Eastern District of New York alleges that in a series of recorded telephone conversations with the undercover agent, HD View CEO Dennis Mancino and William T. Hirschy agreed to manipulate HD View’s common stock by using the agent’s network of brokers to generate fraudulent retail demand for the stock in exchange for a kickback from the trading proceeds.
“This action demonstrates that we will continue to be vigilant in policing microcap markets and will continue to take action as appropriate against those that undermine the integrity of the market with manipulative practices, like matched trading, as alleged in our complaint,” said Antonia Chion, Associate Director of the SEC’s Enforcement Division.