SEC Gives Alleged Stock Manipulators Slap on Wrist

In this recent final judgment, issued yesterday (September 17, 2007), the SEC revealed what is wrong with its enforcement efforts against penny stock manipulators. There was no punitive fine; the accused were only required to give up their profits. This was despite the “egregious nature” of the offenses. If I were to steal $100 from my neighbor I would be ordered to pay restitution plus a fine (often larger than the restitution), and yet these people allegedly stole hundreds of thousands of dollars and they paid no penalty besides giving up their ill-gotten gains and promising not to do it again.

The Court ordered Barnwell to disgorge $31,700 and prejudgment interest thereon. Casias was ordered to disgorge $334,097. Keener was ordered to disgorge $162,000 and was permanently barred him from acting as an officer or director of any publicly traded company. The Court did not order penalties.

Disclosure: I believe that the SEC is incompetent. I have never committed fraud or any other securities violations.

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