WASHINGTON (Legal Newsline) - The Securities and Exchange Commission charged Ronald Feldstein Wednesday for his alleged role in disseminating a fake investment to boost a struggling penny stock company.
Feldstein, 65 and of New York, allegedly pretended to be the president of a private company, LED Capital Corp., and entered into an investment agreement with penny stock issuer Interlink-US-Network Ltd.
But Feldstein was not who he said, the SEC claims. He was allegedly paid by Interlink to play the role so it could spread news of a much-needed capital infusion. Feldstein then helped Interlink disseminate the false information in an SEC filing, the SEC claims.
Interlink was indicted last year as part of a complaint against several alleged perpetrators of a green product-themed Ponzi scheme.
"Feldstein was nothing more than a fake president for hire who schemed with a public company to tout news of a sham investment and deceive investors," said Andrew M. Calamari, Acting Regional Director of the SEC's New York Regional Office.
According to the SEC's complaint filed in federal court for the Southern District of New York, Feldstein purportedly committed LED Capital Corp. to pay $6 million for Interlink shares that had an actual market value of less than $1.2 million. He did so by pretending to be the company's owner, the complaint says.
SEC investigators say they spoke with the real owner who testified that he has been the sole officer-stockholder of LED Capital Corp. and never had any knowledge of the purported agreement. He testified that Feldstein had no authority or permission to act on behalf of the company. Interlink paid Feldstein $400,000 in shares of its common stock.
The SEC charges Feldstein with aiding and abetting violations by Interlink and other violations. The SEC seeks injunctions from future violations of these provisions, disgorgement of ill-gotten gains, and a civil monetary penalty.