Flowers and Nevett Charged with Fraud
On July 19, 2017, the Securities and Exchange Commission (“SEC”) announced fraud charges against Flowers and Nevett, two California men, and a company behind an alleged scheme to manipulate the stock prices of two shell companies.
The SEC alleges that Troy Flowers and his partner Sean Nevett illegally concealed their control and ownership of Licont Corp. and Artec Global Media by using multiple accounts that they controlled in the names of other people and entities. They then allegedly created the false appearance of active trading by making manipulative trades from those accounts to inflate the stock prices. According to the SEC’s complaint, Flowers and Nevett subsequently dumped their own shares into the open market at the expense of innocent investors, who were left with stock that is virtually worthless.The SEC alleges that Flowers, his company Fruition Inc. (previously called Seacoast Advisors), and Nevett reaped approximately $3.8 million in illegal proceeds from the scheme. According to the SEC’s complaint, IP address information confirms that Flowers and Nevett primarily conducted the manipulative trading from their home offices, and Nevett went so far as to impersonate one of the nominee account holders in his communications with brokers.
The SEC’s complaint, which was filed in federal court in the Southern District of California, charges Flowers, Nevett, and Fruition with violating Section 17(a) of the Securities Act of 1933, and Sections 9(a)(1) and 10(b) of the of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. It also seeks relief including permanent injunctions, disgorgement of ill-gotten gains plus interest, penalties, and penny stock bars.
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, or [email protected]. 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.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
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