Business

100 million dollar public exchange NJ accused of securities fraud

Three people involved in a $100 million public company built around a New Jersey junk food store have been charged with securities fraud and market manipulation.

Federal prosecutors on Monday charged James T. Patten, Peter L. Coker Sr. and Peter L. Coker Jr. artificially inflated the prices of two companies through manipulative trading. One of these is Hometown International Inc., whose sole property is “Your Hometown Deli” in Paulsboro, New Jersey, across the Delaware River from Philadelphia’s airport.

Hometown became famous when hedge fund legend David Einhorn of Greenlight Capital marked the company in a Letters to investors in April 2021 as an example of irrational developments in the market. Einhorn notes that the deli barely hit $20,000 in sales in 2019 and even less in 2020 despite hitting a nine-figure valuation.

“The pastrami must be wonderful,” Einhorn commented. “Small investors attracted to these situations can end up being harmed, yet the regulators – who are supposed to be protecting investors – do not appear to be present as well. incurious.”

Patten, 63, and Coker Sr., 80, both North Carolina residents, were arrested Monday and are expected to appear before a federal judge in that state. Coker Jr., 53 years old, a resident of Hong Kong, is still growing up.

The criminal charges follow a parallel civil lawsuit filed against the three people earlier on Monday by the Securities and Exchange Commission. Lawyers for the three men were not immediately identified.

Patten and two Cokers manipulated the value of Hometown’s over-the-counter stock by trading through accounts they controlled to generate active trading, the SEC said in a court filing. Confederation in Camden, New Jersey. They pushed the value of the company above $13 a share, resulting in a market capitalization of over $100 million.

The lawsuit alleges the three men used the same method to push up the price of E-Waste Corp., a Kent, Washington-based company that merged with EZRaider Global Inc., a privately held Nevada corporation. specializes in distributing electric tactical vehicles, in September 2021. .

Inventory $700

At one point, manipulative trading pushed the price of E-Waste from 10 cents a share to $10 a share, resulting in a market capitalization of about $120 million for a company with no revenue. , the SEC said.

The three men were charged with conspiracy to commit securities fraud, securities fraud and conspiracy to manipulate securities prices. Patten was also charged with four counts of securities manipulation, four counts of wire fraud and one count of money laundering. They face up to 20 years in prison if convicted of the most serious offences.

According to the SEC, Patten started the fun with a childhood friend and his girlfriend in October 2015 but soon began conspiring with Cokers to set up a public company to act as a means of communication. reverse merger. After the company started trading in 2019, Patten paid his co-founders $3,000 for a 38% stake in the snack bar and exercised options on their remaining shares. in the next year.

Hometown merged in March with Makamer Holdings, a bioplastics startup, selling the junk food store’s inventory for $700 and the store itself for $15,000.

The criminal case is US v Patten, US District Court, District of New Jersey. The civil case is SEC v Patten, 22-cv-5703, United States District Court, District of New Jersey.

Register Fortune feature email list so you don’t miss our biggest features, exclusive interviews and surveys.

Source link

news5h

News5h: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button