Caledonian Bank Alleged Pump-and-Dump Investigation

investment fraud attorneyCaledonian 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.

Alan Rosca (1225 Posts)

Alan is a securities lawyer. He also teaches Securities Regulation at the Cleveland-Marshall College of Law. He focuses his legal practice on complex commercial and financial litigation and arbitration, particularly in the areas of securities and investment fraud. His office is in Cleveland, Ohio.


In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow cases about which we report, and/or to publish subsequent blogs regarding various developments that may occur in such cases. Readers are encouraged to conduct their own research regarding any such cases and any developments that may or may not have occurred in such cases.