my hero he U.S. Securities and Exchange Commission has won a $52.9-million judgment against West Vancouver's Frederick Sharp over his part in the illegal sale of hundreds of millions of shares on the U.S. markets. (All figures are in U.S. dollars.) The SEC said that Mr. Sharp ran an operation that allowed insiders to secretly unload their holdings through a network of offshore nominees. He and his group facilitated the sale of about $1-billion worth of shares, the SEC claims.
The sanction for Mr. Sharp, 69, is contained in a judgment entered on Thursday, May 12, in federal court in Boston. The judgment includes disgorgement of $21.7-million in gains, plus interest, as well as a $23.9-million fine. The judge has also permanently banned Mr. Sharp from penny stocks and has entered an order barring future violations.
While the decision is a victory for the SEC, it is far from clear if the regulator will succeed in collecting the money from Mr. Sharp. Thursday's penalties were handed down by default, with Mr. Sharp having ignored the case so far. The SEC did, however, freeze several bank and brokerage accounts when it first filed the charges. The institutions holding money related to the charges include Bank of Montreal, TD Canada Trust, Canaccord Genuity Corp., Haywood Securities Inc., Leede Jones Gable Inc., PI Financial Corp. and Research Capital Corp. (The SEC did not make any allegations against the banks or brokerages.) The SEC has not said how much money those accounts contain.