Judge Orders Canadians to Pay $1.37 Million for Stock Deceit
May 05, 2011
BOSTON -- A U.S. District Court here has ordered three Canadians to repay $1.37 million they allegedly made in profits from manipulating the stock of a small Canadian natural gas and oil company. The largest share of the total, $667,770, was judged against Roberto L. Ralph, who agreed to pay it without admitting or denying allegations made by the Securities and Exchange Commission, the agency said. Two others, Leonel and Collene Gearhart, also were ordered to pay $560,611 and $139,602, respectively, the agency said, after they declined to appear in U.S. Court to defend themselves. The individuals and their attorneys couldn't be reached for comment. The order ends an action begun in August 2009 when the SEC charged that the three obtained control of Fairmont Resources Inc., then paid kickbacks in the form of cash and stock to a U.S. promoter and five U.S. stockbrokers. The alleged bribes totaled $600,000 and were used to induce the stockbrokers to sell the stock to their clients, which resulted in a tenfold increase in the company's share price over a six-month period. Earlier, the six others were ordered to pay back their profits and barred from the securities industry. Three also pleaded guilty to federal securities-fraud charges.
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