U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23504 / March 29, 2016
Securities and Exchange Commission v. Tobin Smith, et al., Civil Action No. 1:16-cv-00587 (U.S. District Court for the District of Columbia)
Former Tv Commentator Settles Penny Stock Fraud Charges
The Securities and Exchange Commission today announced that a former market analyst and TV news commentator has agreed to settle charges that he and his company fraudulently promoted a penny stock to investors.
The SEC alleges that Tobin Smith and NBT Group Inc. were paid to prepare and disseminate e-mails, online blogs, articles, and other communications touting the stock of IceWEB Inc., a data storage company. Smith and NBT did not fully disclose their compensation to investors, who did not have the benefit of knowing that part of their pay was tied to a sustained increase in IceWEB's share price. The promotional material also contained false and misleading statements intended to artificially increase the trading volume and share price of IceWEB's stock.
Smith and NBT agreed to be barred from involvement in any future penny stock offerings and must pay disgorgement of $165,900 plus $16,893 in interest. Smith also must pay a $75,000 penalty.
According to the SEC's complaint filed in U.S. District Court for the District of Columbia:
The SEC's complaint charges Smith and NBT with violating the anti-touting and anti-fraud provisions of Section 17(b) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. Smith and NBT neither admitted nor denied the allegations in the settlement, which is subject to court approval.
The SEC's investigation was conducted by Yolanda Ochoa and Finola H. Manvelian and trial counsel are John Berry and Karen Matteson in the Los Angeles office. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.
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SEC Investor Alert: Fraudulent Stock Promotions