The U.S. Securities and Exchange Commission announced on Friday that a federal court in Nevada has fined two B.C. men, and imposed five-year bans for their role in an alleged penny stock scheme.

The SEC reported that the court entered final judgments, by consent, against Ingo Mueller and Firoz Jinnah, both of B.C., “in connection with a fraudulent scheme” involving penny stock issuer Exotics.com, Inc. that traded on the OTC Bulletin Board beginning in 2001.

The final judgments order Mueller to pay a civil penalty of US$75,000, order Jinnah to pay US$50,000, and impose five-year officer and director bars and five-year penny stock bars against both. They agreed to settle the matter without admitting or denying the allegations in the commission’s complaint.

In that complaint, the SEC alleged, among other things, that Mueller, Jinnah, and other participants in the scheme “engaged in manipulative trading of Exotics.com stock for the purpose of artificially increasing the stock’s price and trading volume and were responsible for various false and misleading public filings that Exotics.com made with the commission and for the dissemination of false and misleading public statements about Exotics.com in a press release and spam e-mail and fax messages.”

The commission commenced this action by filing its complaint in April 2005 against a total of 13 defendants and one relief defendant. It previously obtained judgments by default against two other defendants and judgments by consent against four additional defendants. The civil action remains pending against the remaining five defendants and the relief defendant.

IE