The SEC obtained a preliminary injunction against two individuals and their companies on October 26, 2018. The fraudulent actions of these individuals resulted in more than $165 million of illegal sales and stock in at least 50 microcap companies.
According to the SEC, U.K. citizen Roger Knox and his Swiss-based company, Wintercap SA, was involved in antifraud and violating federal securities laws. German citizen Michael T. Gastauer and six of his entities were involved in aiding and abetting Knox and Wintercap’s violations of the same provisions. The court had originally entered a temporary restraining order and asset freeze on October 2, 2018.
The SEC’s complaint states that Knox and Wintercap aided microcap securities holders in evading federal securities laws that restrict sales by large shareholders. Knox and Wintercap gave anonymous access to brokerage accounts in order to sell shares in the U.S. market. They also helped sellers conceal the amount of stock they wanted to sell. Gastauer allegedly established several U.S. corporations to aid and abet the fraud, and allowed Knox to use certain bank accounts to distribute the proceeds of his illegal stock sales.
Over time, Gastauer gained control over 20 bank accounts in the U.S., which he used to facilitate Mr. Knox’s alleged fraud.
This lawsuit filed against Gastauer is only his newest scandal. In 2010, he was given an 18-month suspended sentence by a court in Switzerland for commercial fraud and counterfeiting. Also in 2010, a British gambling company sued him in London for stealing millions of pounds. The company claimed that he had set up a payments processors, but simply kept the payments.
On October 23, 2018, a federal grand jury in Massachusetts indicted Knox on one count of securities fraud and on one count of conspiracy to commit securities fraud. The court’s preliminary injunctions will remain in effect until the litigation of this matter is concluded.
Penny stock or microcap fraud continues to grow. If your financial advisor or stockbroker sold you a penny stock, our investment fraud lawyers may be able to help you recover your losses through securities arbitration. Our attorneys have recovered millions of dollars for investors who are the victims of penny stocks, cold calls, excessive trading and boiler rooms.
Silver Law Group is a nationally-recognized securities law firm headquartered in South Florida representing investors worldwide with their claims for losses due to securities and investment fraud. The firm has successfully recovered multi-million dollar awards for its clients through securities arbitration and the courts. To contact Scott L. Silver to discuss your legal matter, call toll-free (800) 975-4345 or e-mail him at SSilver@silverlaw.com.