posted
i'm willing to bet that this kind of thing goes on alot more than we know....
Rick's Falls on Stock Manipulation Scam Friday March 24, 7:10 pm ET Rick's Cabaret Tumbles After Reaching Year-High; Stock Named Among Those Allegedly Manipulated in Scam
NEW YORK (AP) -- Rick's Cabaret International Inc., which operates a string of gentlemen's clubs, saw its shares fall on Friday -- a day after they reached a 52-week high -- as it was named among the stocks that were artificially manipulated in a scam by members of two organized-crime families.
Shares of the Houston-based company fell 45 cents, or 7.3 percent, to close at $5.75 on the Nasdaq. Trading volume was nearly four times its daily average. The stock hit a 52-week high $6.30 on Thursday, and traded at a year low of $2.55 in June 2005.
According to an indictment handed down by the U.S. District Court for the Eastern District of New York, members of the Colombo and Luchese crime families falsely inflated the prices of more than a dozen stocks by promoting penny stocks -- shares that sell for less than $1 per share -- before selling their own personal holdings at a profit.
Rick's Cabaret President and CEO Eric Langan said in a statement, "We have never heard of any of the people named in this reported Justice Department indictment, we have no relationship with any of them, and we know nothing about these allegations. The first we ever heard of these charges was when we read about them in The Wall Street Journal. Our stock trades in an orderly and transparent fashion and has done so for many years."
The companies whose stocks were involved were not accused of any wrongdoing. In its Friday edition, The Wall Street Journal reported that the stock scheme was part of a broader racketeering case in Brooklyn.
Ten members and associates of the crime families were indicted in Brooklyn, N.Y., federal court on March 16 on charges that include racketeering, conspiracy and extortion. The indictment was unsealed Thursday.
The indictment said the men, who were charged with a spate of racketeering charges, allegedly controlled at least 15 branch offices of brokerage firms in the New York City area and used "high-pressure, false and misleading sales pitches and scripts to convince investors to purchase house stocks."
The indictment also said the accused threatened brokers with physical harm to protect their financial interest.
"Brokers assured investors that the price of the house stocks would rise quickly and made claims exalting the companies' business prospects, although the companies routinely did little or no business," according to the indictment.
-------------------- "Gentleman, you have come sixty days too late. The depression is over." Herbert Hoover 1930
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MORE Corruption Day traders accused in securities fraud scheme 3/21/2006 4:36:13 PM
Several former and current officers, directors, and managers of a Manhattan day trading firm were charged Tuesday in a superseding indictment with participating in a ''front-running'' securities fraud scheme that generated more than $800,000 in illegal profits, prosecutors said.
New charges were filed against Robert F. Malin, vice chairman and president of A.B. Watley Group Inc., and Linus Nwaigwe, the company's director of compliance and a former National Association of Securities Dealers compliance examiner; Michael A. Picone, Watley's former chief operating officer, and Keevan H. Leonard, Watley's former supervisor of proprietary trading.
Also named in the superseding indictment were several people originally indicted in August 2005. They include Kenneth E. Mahaffy, Jr., a former Merrill Lynch & Co. and Citigroup Global Markets Inc. stock broker; Timothy J. O'Connell, a former Merrill stock broker; and David G. Ghysels, Jr., a former Lehman Brothers stock broker.
In addition to the criminal charges, the Securities and Exchange Commission filed a civil complaint against Malin, Nwaigwe, Picone and Leonard.
''Front-running'' occurs when stock brokers inform traders outside the brokerage firm, such as day traders, that a customer of the brokerage firm has placed a large order to buy or sell a particular stock, prosecutors said. The information allows day traders to trade in the same stock before the customer's order is e xecuted, in anticipation of a movement in price. As a result, the firm's customers often do not obtain as favorable a price as they might have.
Steven Scaring, counsel for Mahaffy, has not seen the new indictment yet, but expects that his client will plead not guilty to it as he did to the original indictment.
''We will try to get this case tried as soon as possible. Mr. Mahaffy fully expects to be vindicated,'' Scaring said.
O'Connell's lawyer, Mildred Whalen, also said she hadn't seen the superseding indictment. ''But it is my understanding that there are no new charges against Mr. O'Connell, that the new indictment added on defendents,'' she said.
Jerry Bernstein, attorney for Robert Malin, said his client was falsly accused and will fight the charges. Ghysels' lawyer, Jeff Hoffman, declined to comment until he obtains a copy of the indictment from the U.S. Attorney's Office.
Lawyers representing Nwaigwe, Picone and Leonard were unavailable for comment.
The superseding indictment unsealed Tuesday alleges that between January 2002 and February 2004, Mahaffey, O'Connell, Ghysels and Coughlin routinely provided day traders at three New York City-based day trading firms with customer order information, which was disseminated through internal speaker systems, known as ''squawk boxes.''
Some of the brokers also accepted cash bribes from the day traders in exchange for squawk box access, prosecutors said.
The superseding indictment alleges that the day traders profited from the scheme by trading ahead of the large orders that were broadcast through the squawk boxes. When the squawk boxes disseminated information concerning a large sell order for a particular stock, the day traders would ''short sell'' the same securities before the larger order was executed.
Either way, the day traders profited from the movement in price, prosecutors said.
''By bribing unscrupulous stock brokers, the former A.B. Watley managers and day traders who were charged today were able to secretly tap into a steady flow of extremely valuable, confidential information from some of Wall Street's most well known institutions,'' U.S. Attorney Roslynn Mauskopf said in a statement.
Prosecutors also announced Tuesday that Paul F. Coughlin, another former Merrill broker, and William B. Deakins, a former Watley day trader, pleaded guilty to related charges of conspiracy to commit securities fraud for their roles in the scheme. Ralph D. Casbarro, another former Citigroup broker, pleaded guilty to conspiracy to commit securities fraud last October.
Attorneys for Coughlin and Deakins were also unavailable for comment.
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quote:Originally posted by Repoman75: Turbo, that happens all the time. I used to work for a daytrading firm in Brooklyn where Russian mobsters would come in weekly to collect cash.
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How come are they all named Ivan? LOL
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