Federal authorities on Thursday announced the arrest of 14 people, some of them from Los Angeles, on charges of manipulating stock prices for profits of more than $30 million.
The two indictments allege that the suspects used marketing campaigns, misleading press releases and payments to stock promoters to fraudulently inflate the prices and trading volumes of public company stocks, many of them trading on the over-the-counter market with share prices in pennies.
The two indictments named two separate groups, but many of the same people were in both groups. The arrests were announced by the U.S. Attorney’s Office in Los Angeles.
Authorities allege there were five specific deals that defrauded more than 20,000 investors and generated $31 million in illegal profits.
One of those arrested was Regis Possino, a former Los Angeles County deputy district attorney. Another was Sherman Mazur, a Westwood man who ran a company called London Finance Group Ltd.
Possino is in both groups. The groups are charged with manipulating share prices of companies including FrogAds, an L.A. company that operates an online bulletin board for classified ads. Another person arrested was the chief executive of FrogAds’ predecessor company.
The company hired Pamela Anderson as a spokesperson last year. Authorities do not believe Anderson was involved in the manipulation. The Business Journal featured FrogAds in April when Anderson was hired.
The group also allegedly manipulated the share price of Empire Post Media, a Calabasas post-production house.
The arrests were made Wednesday following a wiretap investigation from the Federal Bureau of Investigation and IRS Criminal Investigation.