Joseph Noel Charged In Stock Scalping Scheme
On November 17, 2014, the Securities and Exchange Commission (the “SEC”) charged Joseph Noel, the Chief Executive Officer of YesDTC Holdings, a San Francisco-based penny stock company. Noel is charged with defrauding investors by issuing false and misleading press releases in order to pump up the stock price up while he secretly sold his shares into the public market for proceeds of over $300,000. This practice is known as “stock scalping”. According to the SEC, Noel portrayed his purported marketing and infomercial company as a successful venture when in fact, it was not. According to the SEC’s complaint against Joseph Noel, he released deceptive press releases that touted exclusive distribution rights, licensing agreements, and certain products purportedly certified by the government.
Noel’s promotional campaigns based on such false information caused a spike in YesDTC’s thinly-traded stock and enabled him to secretly dump millions of his own shares for a profit while telling investors to buy. To conceal the stock scalping scheme, Noel sold the shares through a company he created in his teenage daughter’s name without disclosing that he was actually selling the shares.
The SEC also suspended trading in YesDTC stock today, and instituted an administrative proceeding to revoke its registration. “Noel issued false press releases to pump up the price of the stock and set up a nominee company to dump the shares into the market to unwitting investors,” said Jina L. Choi, Director of the SEC’s San Francisco Regional Office. “We’re always on the lookout for penny stock company CEOs who manipulate the market to line their own pockets.” The SEC’s complaint charges Noel with violating antifraud and registration provisions of the federal securities laws.
The SEC seeks disgorgement of ill-gotten gains plus prejudgment interest and a financial penalty as well as a permanent injunction. The SEC also is seeking an officer-and-director bar and a penny stock bar against Noel.
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 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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