The Securities and Exchange Commission has filed civil charges against Jeremy Koski, a Hawaii resident, for violation of the anti-fraud provisions of the federal securities laws in connection with his alleged manipulation of the trading market in equities backed by J.C. Penny Company Debentures. In its enforcement action, the SEC contends that Koski created false documents and posted them anonymously on internet message boards utilizing various usernames in order to inflate the price of the debentures thereby boosting the value of his significant position in the debenture-backed securities (COTRP).
Per the allegations of the SEC’s complaint, Koski, in May of 2021, posted fabricated notices on the letterhead of US Bank falsely contending that the debentures would be redeemed early at full value which, in turn, caused a huge spike (75%) in COTRP’s stock price. In furtherance of his alleged scheme, the SEC also maintains that in September 2021, and then again in November 2021, Koski created and distributed false COTRP press releases claiming that COTRP will be the first publicly traded security ever to fund to convert to a cryptocurrency, which would thus permit the fund to regain its full value. The SEC asserts that Koski knew that such statements were false.
The SEC Complaint, filed in the U.S. District Court for the Southern District of New York, charges Koski with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) the Securities Exchange Act of 1934 and Rule 10b-5. It further requests a permanent injunction against future anti-fraud violations, a conduct-based injunction (which prohibits a particular type of conduct or activity even if legal), a penny stock bar and civil penalties.
In its litigation release, the SEC thanks the FBI for its investigative assistance in the matter. Never a good sign for a SEC defendant, particularly in the Southern District of New York, where cooperation between the federal criminal authorities, the FBI and the SEC has historically been extremely strong, which has resulted in numerous parallel investigative proceedings and successful coordinated civil and criminal prosecutions.
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David Chase, Esq. is a SEC investigation defense lawyer and former SEC prosecutor, who represents those under SEC investigations nationwide. If you have received a SEC Subpoena, contact David toll-free at: 800-760-0912 or e-mail at: email@example.com. Also visit the Firm’s website for valuable information about the SEC’s investigatory process and critical things to know if you are under SEC investigation, at: www.securitiesfrauddefense.com.