Regulators in Québec have brought charges against 11 people and two companies today in connection with alleged “pump and dump” schemes.
The Autorité des marchés financiers (AMF) announced today that it has launched a joint penal proceeding against 13 defendants that, it says, were involved in market manipulation between 2008 and 2012. In total, the AMF is bringing almost 40 charges in the case. None of the allegations have been proven.
The AMF alleges that the defendants took part in “pump and dump” scams involving microcap securities listed on U.S. over-the-counter (OTC) bulletin board; using false and misleading press releases, social media, and other online channels to tout the growth prospects of various companies, and then selling their holdings in these firms once their share prices increased. It says that its investigation shows that the trading generated over $10 million in proceeds.
The two companies that have been charged with market manipulation are Hilbroy Advisory Inc. IAB Media Inc. Jean-François Amyot, president of Hilbroy and a director at IAB, faces 10 charges; and is named by the AMF as “the ringleader of the presumed scam.”
The regulator says Amyot’s business partner, Francis Mailhot, faces eight charges; noting, “he was president or director of companies allegedly involved in the scam, including Rainmaker Venture Capital Inc. and Hyper Growth Stock Publications Inc.” The AMF has also brought charges against several other individuals that it says were involved with the scheme; some of whom already face existing freeze and cease trade orders.
Back in 2009, Hilbroy issued a statement saying that it “is a service provider to mostly small companies and is not responsible for the business development or the management of its clients, nor can Hilbroy Advisory control their clients’ stock market performance.” At the time, it also claimed to have been victimized, along with several corporate clients, by shell company vendors based in Toronto, and a transfer agency, that was shut down by the Ontario Securities Commission (OSC) and the U.S. Securities and Exchange Commission (SEC).