The U.S. Securities and Exchange Commission filed an emergency action and obtained an asset freeze against two individuals and their companies that were involved in a fraudulent scheme involving the stock of microcap firms.
According to the regulator's complaint, which was filed in district court in Boston, U.K. citizen Roger Knox and his Switzerland-based firm Wintercap SA helped microcap securities holders evade federal securities laws that restrict sales by large shareholders. The regulator disclosed that sellers were able to hide their stock ownership and sell shares anonymously in the U.S. market with the help of Wintercap, previously Silverton SA.
Another individual, Michael Gastauer, allegedly helped in the fraud.
The scheme generated more than $165 million of illegal sales of stock in at least 50 microcap companies, the SEC said.
Along with the asset freeze, the SEC is seeking permanent injunctions, the repayment of ill-gotten gains and penalties.
Meanwhile the U.S. attorney's office for the district of Massachusetts announced criminal charges against Knox.