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Author Topic: CMKM, SEC Charges 14 in $64 Million Penny Stock Scheme
J_U_ICE
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SEC Charges 14 in $64 Million Penny Stock Scheme
FOR IMMEDIATE RELEASE
2008-54

Washington, D.C., April 7, 2008 — The Securities and Exchange Commission today charged 11 individuals and three companies, alleging they conspired to illegally issue and sell unregistered stock in a purported diamond and gold mining company and lined their pockets with more than $64 million from 40,000 investors nationwide.

The SEC complaint alleges that CMKM Diamonds, Inc., with assistance from a transfer agent and an attorney, fraudulently issued hundreds of billions of shares of purportedly unrestricted stock to the scheme's mastermind. The complaint also alleges that CMKM's CEO Urban Casavant generated investor interest in the company through false press releases, Internet chat boards, and "funny car" race events across the country without disclosing that he ran the company from his house in Las Vegas and that CMKM's primary activity was to issue and promote its own stock.
Additional Materials

* Litigation Release No. 20519
* SEC Complaint

Linda Chatman Thomsen, Director of the SEC's Division of Enforcement, said, "The perpetrators of this massive scheme include several securities professionals and an attorney. Today's action demonstrates that we will aggressively pursue individuals who ignore their obligations as gatekeepers to our markets and instead collude with their clients to violate the federal securities laws."

Rosalind R. Tyson, Acting Regional Director of the SEC's Los Angeles Regional Office, added, "The allegations in this case highlight the significant investor harm that results from abuses in the penny stock market. Although CMKM's stock sold for well under a penny a share, the defendants were able to reap millions in profits by conspiring to flood the market with billions of unregistered shares while falsely promoting CMKM's value."

The SEC's complaint charges CMKM, the broker-dealer and transfer agent involved, and 11 individuals including Casavant. The mastermind of the scheme, John Edwards, who was living in Las Vegas, and others allegedly sold their unregistered shares into the public markets for a profit of at least $64.2 million, much of which was paid to Casavant to support his extravagant lifestyle. The complaint alleges that Edwards profited by approximately $26.4 million from sales through a single broker-dealer. Casavant profited by approximately $31.5 million, and others Casavant recruited profited by approximately $6.3 million, according to the complaint.

The SEC's complaint, filed in U.S. District Court for the District of Nevada, alleges that from January 2003 to May 2005, CMKM improperly issued up to 622 billion shares of purportedly unrestricted stock. These issuances allegedly were based in large part on both written authorizations and attorney opinion letters prepared by Brian Dvorak, CMKM's lawyer, which were often inadequate, suspect, and inconsistent. Nonetheless, the complaint alleges that based on these faulty documents, CMKM's transfer agent, 1st Global Stock Transfer LLC, and its owner, Helen Bagley, issued stacks of stock certificates without restrictive legends.

The SEC's complaint alleges that Edwards, his associates Kathleen Tomasso and Anthony Tomasso, and Casavant's cohorts James Kinney and Ginger Gutierrez then deposited the certificates with various broker-dealers and sold the shares into the market. NevWest Securities Corporation and its employees, Anthony Santos, Sergei Rumyantsev, and Daryl Anderson, are alleged to have sold more than 259 billion shares of CMKM stock for Edwards, despite numerous red flags indicating a massive unregistered distribution.

The SEC charged all of the aforementioned participants with violating the registration provisions of the federal securities laws. In addition, the Commission charged CMKM and Casavant with violating the antifraud and various reporting, record keeping, and internal controls provisions.

The SEC seeks a permanent injunction against all defendants and an accounting, disgorgement with prejudgment interest, and civil penalties against all of the defendants except CMKM. In addition, the Commission seeks a penny stock bar against each of the individuals and an order prohibiting Casavant from acting as an officer or director of any public company.

The Commission acknowledges the assistance of the Financial Industry Regulatory Authority (FINRA) and the Saskatchewan Financial Services Commission in this matter.

The SEC's investigation is continuing.

# # #

For more information, contact:

Andrew Petillon
Associate Regional Director
SEC's Los Angeles Regional Office
(323) 965-3214

Finola Halloran Manvelian
Assistant Regional Director
SEC's Los Angeles Regional Office
(323) 965-3980

Molly White
Senior Trial Counsel
SEC's Los Angeles Regional Office
(323) 965-3250


http://www.sec.gov/news/press/2008/2008-54.htm
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Modified: 04/07/2008

[ April 11, 2008, 13:17: Message edited by: Bob Frey ]

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The difference between genius and stupidity is that genius has its limits

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joeyisthebest
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Nice find finally got them
Posts: 795 | From: Brown Deer, WI 53223 | Registered: Feb 2004  |  IP: Logged | Report this post to a Moderator
DDA
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Finally
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CashCowMoo
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FINALLY.


Many on this board, and elsewhere on the net fell for this scam a while back. To this day, many of you have no idea...but to this day even AFTER this news release came out there is still a large group of shareholders who believe that this was all part of some master plan. they believe that CMKX shareholders are getting a payout of .54 cents per share.

Its sick what the pumpers and promoters feed some people.

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It isn't so much that liberals are ignorant. It's just that they know so many things that aren't so.

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Love the Market
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Wanna bet the bums never go to jail??
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TruthLiesWithin
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Pump and dumps go on all the time, even here.

But this Diamond deal took the cake...glad I listened to my brain on this one....

But not to say I didn't get roped into several others...

I wrote off pinks, still working on ignoring OTC too..

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BooDog
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Here's another one, didn't want to start a new thread.

Still trying to find who the overseas connections were. What’s worse imo is that one ceo isn’t even mentioned in the litigation. How could they miss him?

http://www.sec.gov/litigation/complaints/2008/comp20525.pdf

http://findarticles.com/p/articles/mi_m0EIN/is_2004_Feb_18/ai_113382490

through a few changes they are now PXIT.ob…
http://finance.yahoo.com/q/pr?s=PXIT.OB

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All post are my opinion. Do your own DD. Who's clicking your buy/sell button!?

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glassman
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the "interesting issue" in this is how they are charging them.

UC and his lawyer are apparently being charged with failing to register the stock they sold.

the complaint alleges that based on these faulty documents, CMKM's transfer agent, 1st Global Stock Transfer LLC, and its owner, Helen Bagley, issued stacks of stock certificates without restrictive legends.

The SEC's complaint alleges that Edwards, his associates Kathleen Tomasso and Anthony Tomasso, and Casavant's cohorts James Kinney and Ginger Gutierrez then deposited the certificates with various broker-dealers and sold the shares into the market. NevWest Securities Corporation and its employees, Anthony Santos, Sergei Rumyantsev, and Daryl Anderson, are alleged to have sold more than 259 billion shares of CMKM stock for Edwards, despite numerous red flags indicating a massive unregistered distribution.


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Don't envy the happiness of those who live in a fool's paradise.

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ed19363
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Is there ANY chance that the certificate holders will ever see ANY money from this, or do the lawyers and government keep it all. If I remember correctly, there was a certificate registration push just about the time this went under, so they should know who still holds the shares.
Any comments??

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If I give you bad information, please feel free to sue me. I have nothing left anyway.
Ed

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joeyisthebest
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I have my Certs to wipe my a$$ with LOL will clean the brown off if its worth anything tho. [Smile]
Posts: 795 | From: Brown Deer, WI 53223 | Registered: Feb 2004  |  IP: Logged | Report this post to a Moderator
   

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