Friday, October 07, 2016 12:59:33 PM
Litigation Release No. 23671 / October 4, 2016
SEC Obtains Final Judgments Against Two in Scheme to Manipulate Stock of Massachusetts-based Sports Ticket Broker
https://www.sec.gov/litigation/litreleases/2016/lr23671.htm
The final judgments enjoin Flaherty and Brazil from violating Sections 5(a), 5(c), and 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5(a) and (c) thereunder. In addition, the final judgments order that Brazil's and Flaherty's obligation to pay disgorgement of $1,519,213 and $1,350,734, respectively, be deemed satisfied by the orders of forfeiture entered in the parallel criminal proceedings against them.
In parallel criminal proceedings, Flaherty was sentenced on June 8, 2016 to one year of probation, to be served in home confinement, ordered to pay a fine of $10,000 and ordered to forfeit $1,350,734. Brazil was sentenced on June 2, 2016 to one day in prison, three years of supervised release, ordered to pay restitution of $231,140, and ordered to forfeit $1,519,213. Brazil and Flaherty each had pleaded guilty to one count of conspiracy, one count of securities fraud, and one count of wire fraud in December 2014, and both cooperated with the criminal authorities and subsequently testified in a related criminal trial of Weed prosecuted by the Massachusetts U.S. Attorney.
On May 16, 2016, a jury returned a guilty verdict against Weed for conspiracy to commit securities fraud and wire fraud, securities fraud, and seven counts of wire fraud. On August 22, 2016, Weed was sentenced to 4 years in prison and three years of supervised release and ordered to pay a fine of $100,000 and to forfeit $90,000.
The SEC's pending action against Weed seeks disgorgement of ill-gotten gains plus pre-judgment interest and penalties as well as a penny stock bar and a permanent injunction against further violations of the securities laws. The SEC also seeks to bar Weed from serving as an officer or director of any public company. On September 13, 2016, the SEC ordered that Weed be forthwith suspended from appearing or practicing before the Commission pursuant to Rule 102(e)(2) of the Commission's Rules of Practice, based on his criminal conviction.
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