Four men face charges of manipulating De Beira Goldfields Inc.’s stock price to make 38 million euros ($48.5 millon) in profits, German prosecutors said today.
The men recommended the stock in publications 62 times between May and June 2006 without disclosing that they also owned it, Claudia Krauth, a spokeswoman for prosecutors in Stuttgart said in an e-mailed statement. Within four weeks, the price rose from 1.40 euros to 18.50 euros and the men sold their stakes, she said. The suspects weren’t identified.
German prosecutors have been cracking down on fraud with so-called penny stocks. Munich investigators in March conducted 86 raids in Germany and other countries in a similar case. Earlier this year, they won convictions concerning a scheme using a newsletter for small investors.
Krauth said the pushing up the price of the De Beira Goldfields stock plot came from a 32-year-old Austria-based public relations manager and a 33-year-old Canadian accomplice.
The pair enlisted a 46-year-old German journalist from the state of Baden-Wuerttemberg and a 39-year-old business manager from Bavaria.
All the men except the Canadian, who is in custody, admit taking part in the scheme to boost the price of the mineral exploration company, according to Krauth. Austria has so far denied a request to extradite the public-relations manager, she said. De Beira Goldfields changed its name to Panex Resources Inc. in September 2010.