Florida Transfer Agent Charged With Defrauding Investors

A Florida transfer agent and its owner have been charged by the SEC for relying on aggressive boiler room tactics to pressure investors into buying worthless securities. Publicly-traded companies commonly use transfer agents to keep track of the people and entities that own the businesses’ securities. To protect investors and discourage illegal investment scams, the U.S. Congress set up a whistleblower program in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Whistleblowers who notify the Securities and Exchange Commission (SEC) about illegal trading may be rewarded for collaborating with the SEC. Tipsters could receive compensation equivalent to thirty percent of the amount the government recoups, provided the recovery tops $1 million.

Transfer Agent Settles Charges Of Duping Investors Into Purchasing Sham Securities, Then Spending Cash On Personal Expenses

Cecil Franklin Speight was the owner of International Stock Transfer Inc. (IST), a registered transfer agent in Florida. According to the SEC, Speight created and issued multiple sham securities certificates to investors in the U.S. and abroad. The phony certificates were for foreign bond certificates and microcap stock certificates that had no connection to IST. Speight duped investors into believing that they were buying discounted stock and high-yield investments. To lend an air of credibility to the operation, Speight recruited two lawyers who first deposited investments into their bank accounts and then forwarded the funds to IST. But the money was never invested. Speight and his company spent it as fast as it was funneled in. Some went to pay Speight’s personal expenses and the rest went to make Ponzi-like interest payments to early investors. By the time the scam was called to a halt, Speight and IST had swindled over $3.3 million from 70 investors.

Speight and IST have consented to settle the SEC’s charges. They will disgorge their ill-gotten gains and also pay penalties and prejudgment interest.

Whistleblowers Notify SEC of Securities Scams by Transfer Agents

While Waters & Kraus is not handling this particular securities fraud case, we are representing whistleblowers in similar matters involving violations of securities laws. If you have similar claims against a different transfer agent or someone else in the securities field, contact us by email or call our qui tam attorneys at 855.784.0268 to learn more about our practice and how we can work together to notify the government about SEC fraud. Loren Jacobson and Charles Siegel, SEC fraud attorneys in the firm’s Texas office, have the experience necessary to protect and advance whistleblowers’ interests in securities fraud matters.

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