Caledonian Bank Alleged Pump-and-Dump Investigation
Caledonian Bank and Caledonian Securities Sued by SEC for Alleged Penny Stock Pump-and-Dump Securities Law Violations
Caledonian Bank and Caledonian Securities, along with Verdmont Capital S.A., were sued by the U.S. Securities and Exchange Commission (SEC) for alleged securities law violations, and reached an agreement to reduce its U.S. assets that are subject to a freeze order from $19 million to $2 million, according to, according to an SEC civil lawsuit.
The reduction raises questions for many regarding the temporary restraining order for Caledonian Bank over US$76.6 million, according to SEC documents.The size of the initial restraining order, the SEC civil lawsuit further alleges, apparently double the estimated turnover of four alleged penny stock pump-and-dump schemes traded through Caledonian Securities, directly contributed to a run by depositors on Caledonian bank and its subsequent insolvency.
Verdmont’s asset freeze now covers substantially less than the sales proceeds of the alleged pump-and-dump schemes, which contrasts Caledonian’s temporary restraining order, according to an SEC civil lawsuit.
Verdmont Trader Netted $228,665.52 in Commissions
Verdmont opposed the initial temporary restraining order, the SEC documents report, stating that the funds were largely those of clients not connected to the lawsuit and sales of the four stocks concerned.
In court filings, Verdmont stated that it did not trade any of the four stocks on its own account, except for one alleged day trade, which resulted in a profit of $11,300, and net commissions for the sales of the stocks amounting to $228,665.52, according to the broker.
The SEC civil lawsuit alleges that Verdmont, Caledonian and two brokers in Belize, Legacy Global Markets SA and Clear Water Securities Inc., allegedly sold restricted, unregistered shares to the public in the U.S. in violation of the U.S. Securities Act.
The Peiffer Rosca Wolf Investor Rights Lawyers Often Represent Investors
The Peiffer Rosca Wolf investor rights lawyers often represent investors who lose money as a result of investment misconduct. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.
Investors who believe they lost money as a result of investment misconduct may contact the investor rights lawyers at Peiffer Rosca Wolf, Alan Rosca or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at 888-998-0520.