WASHINGTON (Legal Newsline) — The Securities and Exchange Commission announced July 12 that it has charged 13 individuals involved in two alleged cold calling scams that bilked more than a hundred victims out of more than $10 million.

“These kinds of scams cause devastating harm to investors,” said Stephanie Avakian, co-director of the SEC’s Enforcement Division.  “Investors must beware of the sort of conduct alleged in our complaint – things like unsolicited calls, high-pressure sales tactics, and promises that a no-name stock is going to skyrocket.”

The operators of the scheme allegedly used boiler room-style call centers to make hundreds of thousands of calls to consumers. In these calls, the defendants’ salespeople would purportedly use high-pressure sales tactics and lies about penny stocks. They allegedly would threaten and pressure victims – many of whom were senior citizens – until the victims purchased penny stocks.

“The defendants allegedly used boiler rooms and high-pressure sales tactics to swindle seniors into investing their life savings in microcap securities they were secretly manipulating for their own profit,” said Scott W. Friestad, associate director of the Enforcement Division.  

“But, through a combination of technology and innovative investigative approaches, we were able to unravel the alleged scheme and prevent further investor harm.”

The SEC seeks permanent injunctions, disgorgement with interest, civil penalties, penny stock bars and an officer-and-director bar from one of the scheme operators.

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