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Tuesday, July 23, 2024

SEC Charges Of Pump-and-Dump Scam Against Spartan Capital Securities


Spartan Capital Securities Lawsuit


If you are following up with the Spartan Capital Securities lawsuit, you may already know how big of a deal this lawsuit has become, right? Well, if you still aren’t familiar with the details of this case like what were the allegations, what went down, and things like that, then keep on reading. Here we go.


A Little Bit About Spartan Capital Securities, LLC

First of all, why not get to know about Spartan Capital Securities, LLC, right? Well, offering services in investment banking and equities research is this New York-based broker-dealer Spartan Capital Securities. Though, they have lately been in the news for all the wrong reasons. Why? Known for dealing in penny stocks, or microcap stocks, these inexpensive shares of small businesses, this company is currently surrounded with a whole bunch of legal problems. To grasp what is happening, one must grasp these problems. Spartan Capital is in serious water for its dealings with these cheap stocks, and that’s the very reason why several lawsuits and regulatory proceedings have questioned its business practices.


The Big Allegations and Charges

You see, recently, the Securities and Exchange Commission (SEC) has sued Spartan Capital Securities and several companies that are connected to it. The main and surely the biggest claim of the Spartan Capital Securities Lawsuit is that they took part in a “pump-and-dump” scam. This shady business includes making false and misleading statements to artificially raise stock prices and then selling those stocks for a profit. Spartan Capital Securities Group, Island Stock Transfer, and people like Dilley and Eldred have all been blamed by the SEC for their involvement in this plan from the very beginning of this lawsuit. Part 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5(b) were broken as per the claims of the other party. And yes, the court found them guilty and gave them harsh punishments, such as large fines and having to return the money they made illegally.


Though, a related company, Spartan Trading Company, LLC, is the target of another big lawsuit. As per the SEC, this business and its founder, Richard Myre, were running a fake joint investment fund, which is another reason to drag them in court. As per the claims, investors gave them more than $3.7 million, but they didn’t really spend much of it, well, on what that fund was meant to be spent on, you know? When they did make purchases, most of the time they lost money. The SEC now wants to stop these shady activities for good and get back the money that was stolen.


Legal and Financial Fallout Of This Spartan Capital Securities Lawsuit

It shouldn’t be hard to understand that the legal problems Spartan Capital is having have very bad effects. The court has fined the company and the people who were involved in these frauds a lot of money. Within this very lawsuit, Spartan Securities and Island Stock Transfer were each fined $250,000, and Dilley and Eldred were each fined $150,000. And yes, Island Stock Transfer also has to pay more than $154,000 in interest and fees. The goal of these punishments is to punish those who did wrong and send a message that will stop people from doing the same thing again.


Even more, Spartan Capital is being closely watched by the SEC and FINRA (Financial Industry Regulatory Authority). Though, they could add more penalties and rules, which would make it hard for Spartan Capital to do business as normal.

Parul is an experienced blogger, author and lawyer who also works as an SEO content writer, copywriter and social media enthusiast. She creates compelling legal content that engages readers and improves website visibility. Linkedin

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