- The SEC charged Charlie Abujudeh with running microcap stock fraud schemes targeting retail investors.
- According to the SEC, Abujudeh generated over $9 million in illicit proceeds relating to the scheme.
- The "linchpin" of Abujudeh's schemes was that he controlled nearly all of the float for each of the companies that he promoted, the SEC said.
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The US Securities and Exchange Commission filed an emergency action charging a California man with running microcap stock fraud schemes targeting retail investors, the regulator said Thursday.
According to the SEC's complaint, Charlie Abujudeh worked alongside others to fraudulently sell a number of microcap stocks to retail investors in companies including Scepter Holdings, Odyssey Group International, and CannaPharamRX Inc between August 2019 and September 2020.
Abujudeh and his associates sold the microcap stocks to investors by making misleading statements during high pressure sales calls and email promotions, the SEC said.
He generated over $9 million in illicit proceeds by selling shares of those companies to investors during the promotions he funded, the SEC said.
As part of the scheme, Abujudeh paid stock promoters to hype up Odyssey stock over the phone to "unsuspecting retail investors," and used emailed promotional campaigns to draw attention to the stocks, the SEC said.
According to the complaint, the "linchpin" of Abujudeh's schemes was that he controlled nearly all of the float, or stock available for public trading, for each of the companies that he promoted.
"This control enabled him to manipulate the market for these securities using a variety of deceptive tactics, most often through deceptive promotional campaigns that he funded and controlled," the SEC said.
He also allegedly funneled hundreds of thousands of dollars of the illegal Odyssey stock sale proceeds to an Odyssey insider with whom he had been coordinating.
The complaint was filed in the US District Court for the Eastern District of New York. Abujudeh was charged with violating the antifraud and registration provisions of the federal securities laws.