262728traded stock price. Thus, the manipulation
the publicly-traded stock priceallowed the boiler rooms to sell the Regulation S shares at a higher price to theoverseas investors.
The boiler rooms, teams
unregistered telemarketers operatingmostly from Spain, used high-pressure sales tactics and material false statementsand omissions to induce the investors (many
them elderly and located in theUnited Kingdom) to buy the Issuers' Regulation S stock. Based on a structurecreated by Geranio, the boiler rooms directed the investors to send their money toescrow agents in the U.S.
Under Geranio's oversight, the escrow agents paid 60% to 75%
theapproximately $35 million
proceeds to the boiler roo'ms as their sales markups,kept 2.5% as their fee, 'and paid the remaining proceeds to the Issuers. The Issuers'(or in some cases the escrow agents) then funneled approximately $2.135 million
the Regulation S sales to Geranio, through The Good One andKaleidoscope. The Issuers and the escrow agents paid Field approximately$279,000.
By committing the acts described in this Complaint, Geranio, Field,The Good One and Kaleidoscope directly or indirectly engaged in and, unlessrestrained and
by the Court, will continue to engage in, transactions, acts,practices and courses
business that violate Section 17(a)(I) and (3)
1933 (the "Securities Act")
U.S.C. § 77q(a)(1)
(3)] andSection 10(b)
the Securities Exchange Act
1934 (the "Exchange Act")
U.S.C. § 78j(b)] and Rule 10b-5(a) and (c) [17 C.F.R. § 240.10b-5(a) and (c)].Field also directly or indirectly engaged in acts, practices or courses
businessthat violate Securities Act Section 17(a)(2) [15 U.S.C.
77q(a)(2)], and aided andabetted the Issuers' violations
Exchange Act Section 10(b)
78j(b)]and Rule 10b-5(b) [17 C.F.R. § 240.10b-5(b)]. Geranio also is liable as a controlperson
The Good One and Kaleidoscope under Exchange Act Section 20( a)