A Canadian lawyer stands accused by U.S. securities regulators of orchestrating a scheme involving the creation of numerous shell companies.
The U.S. Securities and Exchange Commission (SEC) said Thursday that it has charged several attorneys, auditors, and others in connection with an alleged scheme to pitch sham offerings to investors. Last year, the commission suspended the registration of 20 microcap mining firms, which it says were ripe for use in pump-and-dump schemes.
Now, the SEC is alleging that a Vancouver-based lawyer that was already suspended by the regulator is behind the scheme. The regulator alleges that the lawyer, John Briner, recruited people to serve as figurehead executives at the firms while he secretly controlled them. It also says that none of the companies had any intention of pursuing mining, and mineral claims purportedly owned by each company were never actually transferred to them.
Back in 2010, Briner settled an SEC action against him alleging that he was involved with a market manipulation scheme. Among other sanctions, he was banned from participating in penny stock offerings for five years.
In this case, the SEC alleges that he, and several others, violated securities laws in establishing the shell companies. The allegations have not been proven.
“Briner allegedly orchestrated a massive scheme to create public shell companies through false registration statements,” said Andrew Calamari, Director of the SEC’s New York Regional Office. “Our action in this case proactively prevented Briner and his cohorts from carrying out the fraud to an extent that directly harmed investors.”
In separate orders instituting settled administrative proceedings, three of the figurehead CEOs agreed to settlements for their involvement in the scheme. Without admitting or denying the SEC’s findings, they each agreed to be barred from serving as an officer or director of a public company or from participating in penny stock offerings. They also agreed to give up money paid to them as “consulting” fees and pay additional penalties.