Man Fined for Penthouse Statements Charged With Stock Fraud
- Prosecutors say investors scammed in pump-and-dump swindle
- Group used shares of Bermuda company in crime, U.S. alleges
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A California man previously fined over financial statements for Penthouse magazine’s former publisher was among seven people arrested on federal charges that they ran a stock swindle that cost Gerova Financial Group Ltd. investors almost $20 million.
Jason Galanis, 45, is accused of gaining control of the Bermuda-based financial-services company with the help of its then-chairman, Gary Hirst, and driving up the stock price before secretly selling shares they held. Hirst is also charged in the pump-and-dump case, which prosecutors said ran from 2009 to 2011.