FBI Arrests Securities Attorney and Stock Promoter in Texas
Securities Lawyers Gone Wild Blog
On September 19, 2013, the Dallas Division of the Federal Bureau of Investigation (“FBI”) announced the unsealing of an indictment charging Jason Wynn, a former penny stock promoter, and securities attorney Martin Cantu with crimes committed in connection with a company called ConnectAJet.com (CAJT). The two men were arrested last Friday and Wednesday, respectively. Each stands accused of one count of conspiracy to commit securities fraud, and one count of securities fraud.
The indictment was a long time coming.
ConnectAJet had its brief day in the sun between May and October 2007. CAJT claimed to offer the first online, realtime booking system for private jet charters.
In reality, no such system existed; it was described by the Securities and Exchange Commission (“SEC”) as “aspirational, at best.” The U.S. Attorney’s Office alleges that Wynn and Cantu conspired with each other and with associates to deceive potential investors about the company. Cantu controlled the company; with Wynn’s help, he launched a nationwide advertising campaign, issued fraudulent press releases and published misleading information on the company website.
As in many penny stock scams, the fraudsters began by issuing unregistered stock to collaborators who, as the promotion progressed, sold it into the market in violation of securities laws.
On October 1, 2007, the SEC suspended trading in ConnectAJet. A year later, on September 23, 2009, the agency brought a lawsuit against the company and a number of the perpetrators of the fraud. Wynn, though referenced in the enforcement action along with his Wynn Holdings, LLC, was not named as a defendant. The SEC revoked registration of CAJT’s stock in September 2011.
The DOJ rectified the SEC’s omission. According to the unsealed indictment, entities controlled by Wynn sold 4.2 million CAJT shares, making profits of $2.585 million. Cantu made $548,881. The indictment also names Ryan Reynolds, a former broker, as a co-conspirator. Reynolds has already pled guilty to conspiracy to commit securities fraud.
The maximum penalties for each defendant, if convicted, are five years’ imprisonment and a fine of $250,000 for the conspiracy count, and 20 years’ imprisonment and a $5 million fine for the securities fraud count. Restitution could also be ordered.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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Brenda Hamilton, Securities Attorney
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