March 15 (Bloomberg) -- Carrillo Huettel LLP, a San Diego law firm, and Gibraltar Global Securities were sued by the U.S. Securities and Exchange Commission over claims they took part in an international “pump and dump” stock-selling scheme.
The SEC said the defendants were part of a group of individuals who used a boiler-room operation to promote and artificially inflate the sale of two publicly traded U.S.-based companies, Tradeshow Marketing Co. and Pacific Blue Energy Corp.
The defendants allegedly secretly took control of the companies and inflated the stock prices with false and misleading promotions. They also allegedly hired a group of salespeople who called U.S. investors to tout the stocks, falsely claiming the information was based on independent research.
The commission alleges that the defendants sent out investors from two stock-touting websites they controlled -- Skymark Research and Emerging Stock Report. U.S-based attorneys Luis Carrillo and Wade Huettel were described as “central participants” in the scheme by helping promoters acquire control of Pacific Blue through offshore nominee entities. Gibraltar is an unregistered broker-dealer incorporated and located in the Bahamas, the SEC said.
The defendants earned at least $11 million by “scalping” Pacific Blue and Tradeshow shares, or secretly selling the stock while simultaneously promoting them to investors.
In August 2011, the Alberta Securities Commission filed an interim cease-trade order against Skymark and its representatives, putting a halt to its fraudulent promotion, the SEC said.
Nicholas De Feis, a lawyer for Gibraltar, and William Fleming, a lawyer for Wade Huettel, didn’t immediately return voice-mail messages left at their offices seeking comment on the suit.
The case is SEC v. Carrillo Heuttel, 13-cv-01735, U.S. District Court, Southern District of New York (Manhattan).
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