The SEC has filed a proposed default judgement in their lawsuit against Jean Francois Amyot.
See the Stockwatch article for a good synopsis, excerpted below:
The U.S. Securities and Exchange Commission has filed a motion for a default judgment of up to $12.2-million against Quebec’s Jean-Francois Amyot, citing his “especially egregious” conduct in a 2010 pump-and-dump. (All figures are in U.S. dollars.) The SEC says he sold 22 million unregistered shares of a pink sheets company called Spencer Pharmaceuticals Inc. while orchestrating a bogus takeover. The scheme involved several false and misleading news releases, and resulted in profits to Mr. Amyot of $5.8-million, according to the SEC.
Excerpt from the litigation release:
The Commission’s complaint, filed in the U.S. District Court for the District of Massachusetts, alleges that beginning in November 2010, Spencer, a purported pharmaceutical company with addresses in Boston, Massachusetts, and Canada, disseminated false and misleading press releases claiming that it had received an unsolicited buyout offer from a Mideast company for $245 million when, in fact, the purported buyout offer was not real. The complaint further alleges that Arella and Morrice worked with Amyot to create and disseminate the fraudulent press releases. According to the complaint, while Spencer was issuing the press releases, the defendants were conducting a promotional campaign using Internet websites and newsletters to tout Spencer’s stock and the bogus buyout offer, and the false press releases and promotional campaign were successful in pumping up the price of Spencer’s stock. For example, after Spencer publically announced that the Mideast company proposed to pay $245 million for Spencer, the price of Spencer stock more than doubled in two days – opening at $0.25 per share on November 10, 2010 and closing at $0.60 per share on November 12 – and the daily trading volume for Spencer’s stock reached almost six million shares on November 11, compared to a daily average trading volume of less than 50,000 shares during the previous three months. During the time the buyout offer was being promoted, Amyot sold approximately 36 million Spencer shares for gross proceeds of approximately $5.8 million. Each of the defendants are charged by the Commission with violating various antifraud provisions of the federal securities laws. The complaint further charges Spencer, Amyot, and Arella with violating securities registration provisions of the securities laws. According to the complaint, Amyot and Arella were involved in a series of transfers involving 12 million Spencer shares that were done to evade the securities registration requirements and move the shares into an account controlled by Amyot.