SEC Charges International Microcap Fraud Scheme Participants

The Securities and Exchange Commission today announced an emergency action charging nine individuals, including a public company chairman, for their participation in long-running fraudulent schemes that collectively generated hundreds of millions of dollars from unlawful stock sales and caused significant harm to retail investors in the United States and around the world. The SEC has obtained emergency relief in court, including an order to freeze the defendants’ assets. According to the SEC’s complaint unsealed today, Canadian resident Frederick L. Sharp masterminded a complex scheme from 2011 to 2019 in which he and his associates – Canadian residents Zhiying Yvonne Gasarch and Courtney Kelln – enabled control persons of microcap companies whose stock was publicly traded in the U.S. securities markets to conceal their control and ownership of huge amounts of penny stock. They then surreptitiously dumped the stock into the U.S.