Hemp Today
A group of men have been convicted in Ohio for participating in a “pump-and-dump” conspiracy involving a penny stock company that proposed to make hemp-infused drinks.
The U.S. Attorney’s Office for the Northern District of Ohio said the scam cost investors roughly $2 million, leading to a combined total of 165 months imprisonment for the conspirators.
A “pump-and-dump” scheme is a financial scam where false information is used to artificially “pump” up the price of a stock. Practitioners issue hyped-up, bogus information through social media channels and online press release services that do not check the information they spread, which often reaches unwitting investors. The schemers then sell – or “dump” – their shares after they reach a higher price. Such a selloff sends the share price crashing, leaving investors with worthless stock.
Defendant Scott Levine was charged with leading the scheme at Global Resource Energy Inc. (GBEN) in which company insiders dealt themselves a massive number of shares at low prices which they later dumped, according to the U.S. Attorney.
According to court documents, GBEN reported more than 77 million shares outstanding and a market capitalization of more than $40 million in June 2020. However, the company’s statements for the period ended March 31, 2020 reflected total revenue of negative $2,116, a net loss of $66,384, and negative retained earnings of roughly $2.4 million.
Secret agreement
Prosecutors said defendant Gary Kouletas and others entered secret agreements with GBEN insiders to hawk the stocks for part of the proceeds through a separate entity, PAG Group.
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https://hemptoday.net/scammers-get-jail-time-in-2-million-hemp-drink-pump-and-dump-scheme/
