July 3 (Bloomberg) -- The U.S. Securities and Exchange Commission sued 10 Argentine citizens, claiming they illegally sold millions of shares of Biozoom Inc., a company that in April shifted its business from leather bags to biomedical technology.
The sales, which took place during a one-month period beginning in May, yielded almost $34 million, $16 million of which is still in U.S. brokerage accounts, the SEC said today in a statement announcing an asset freeze. Trading in Biozoom stock was halted last week.
Biozoom, the Las Vegas-based company formerly called Entertainment Art Inc., said in April that it was changing its name and moving from producing leather bags to developing biomedical technology, the SEC said. The defendants deposited millions of shares in brokerage accounts between March and June, claiming they had purchased them from Entertainment Art shareholders between November and March, the agency said in a lawsuit filed today in federal court in Manhattan.
The SEC said in its complaint that the stock-purchase agreements were false because the Entertainment Art shareholders had sold all of the stock three years earlier.
“Today’s action, along with the SEC’s trading suspension order last week, demonstrate the SEC’s ability and commitment to act swiftly to halt ongoing illegal conduct and preserve assets,” Antonia Chion, associate director of SEC enforcement, said in the agency’s statement.
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