The Securities and Exchange Commission (SEC) recently filed a complaint alleging that during the period of March 2012 through February 2013, Edmond L. Lonergan and the Green Planet Group, Inc. (Green Planet) engaged in a fraudulent market manipulation scheme. According to the SEC, this scheme involved illegal bribes to a corrupt promoter and his buying group to purchase shares of Green Planet in the open market. However, the corrupt promoter working for Mr. Lonergan was actually an informant cooperating with the Federal Bureau of Investigation (FBI). The SEC alleged that Mr. Lonergan engaged in this scheme in an effort to generate the appearance of market interest, induce public purchases of the company’s stock, artificially increase volume in Green Planet stock and increase the stock’s trading price to sell his own Green Planet stock.
The SEC alleged that Mr. Lonergan and the FBI informant first agreed to engage in a fraudulent Green Planet stock market manipulation on March 30, 2012. Mr. Lonergan allegedly told the informant that he wanted him to cause two to three million shares of buying and increase the stock price from a half a cent to maybe two or three cents. Mr. Lonergan allegedly promised the FBI informant 1 share of stock for every 3 to 5 shares of purchases his group generated in the market place. The SEC further alleged that Mr. Lonergan agreed to arrange for Green Planet to issue timed press releases and provide advance copies to the witness of “front run news” before Green Planet actually issued the releases to the public. Mr. Lonergan then removed the restrictive legend on two stock certificates totaling 1 million restricted shares of Green Planet to allow the shares to be sold in the market place as payment for the informant’s role in the scheme. As part of the sting, the FBI purchased a total of 125,600 shares of Green Planet stock.
Months later, Mr. Lonergan emailed the FBI informant again and asked if he was available to help move Green Planet stock prices to over 3 cents per share. Mr. Lonergan estimated that another four to five million shares of Green Planet stocks would need to be purchased in order to achieve that price increase. Mr. Lonergan allegedly told the FBI informant that he would be “unloading” about 987,000 shares of Green Planet stocks he owned. Mr. Lonergan then mailed the witness 1 million shares of Green Planet stock as payment for generating interest in the stock. The SEC alleged, as part of the FBI sting, that it purchased an additional 200,000 shares of Green Planet stock. The SEC has charged Mr. Lonergan with fraud in violation of Section 10(b) and Rule 10b-5(a), and Rule 10b-5(c) of the Exchange Act.
Attorney Pearce began his career at the SEC as an enforcement attorney more than 40 years ago. His SEC defense law practice clients have included public companies and their officers and directors, broker-dealers, investment advisors, and individuals being investigated in connection with their personal securities transactions. He has broad, extensive experience in matters arising from alleged 10b-5 fraud violations including, “insider trading,” Section 16(b) “short swing profit,” and Section 14 “proxy rule” violations as well as Section 9 “market manipulation” cases.
Have you have been contacted by the SEC or believe that you may be subject of an investigation? If so, call Mr. Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce defends various entities and individuals who may be the subject of an SEC investigation or enforcement action regarding their alleged involvement in securities laws violations.
This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 40 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to representing investors and financial industry professionals throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at email@example.com for answers to any of your questions about this blog post and/or any related matter.