DD Support Board and Research Team

[scion]

FACTS

Trading in ISML

25. Prior to the promotion of ISML that began on April 20, 2012, A. Hawatmeh engaged in coordinated trading with Mrowca, Galas and others to accumulate a large position in ISML and to increase the price and volume of ISML in advance of the promotion.

26. A. Hawatmeh began buying ISML on December 15, 2011. By April 10, 2012, A. Hawatmeh had accumulated approximately 2.6 million shares of ISML common stock through market purchases at prices ranging from $.0097 to $.09 per share.

27. A. Hawatmeh’s trades in ISML common stock from December 15, 2011 through 1 April 10, 2012 constituted approximately 85% of the total trading volume of ISML common stock during that period.

28. From January 18, 2012 to February 10, 2012, Galas acquired 70,000 shares of ISML common stock at prices ranging from $.03 to $.043, which he sold on February 28 for $.07 5 per share.

29. From December 15, 2011 through April 10, 2012, the price of ISML rose from less than a penny per share to a high of over $.09 per share.

30. From April 11, 2012 through April 19, 2012, A. Hawatmeh was a net seller of ISML, while Galas and Mrowca were net buyers of ISML.

31. From April 11, 2012 through April 19, 2012, A. Hawatmeh sold 1.88 million shares of ISML at prices ranging from $.055 to $.12 per share, and purchased approximately 280,000 shares at prices ranging from $.04 to $.0951 per share. A. Hawatmeh’s trades during this period constituted approximately 65% of the total trading volume of ISML common stock.

32. From April 11, 2012 through April 16, 2012, while A. Hawatmeh was selling 15 ISML, Galas accumulated 170,000 shares of ISML at prices ranging from $.06 to $.07 per share. Between April 11, 2012 and April 19, 2012, Galas was a net buyer of 85,000 shares.

33. From April 13, 2012 through April 18, 2012, Mrowca bought and sold 125,000 shares of ISML. By close of trading on April 18, 2012, Mrowca owned no shares of ISML.

34. A. Hawatmeh, Mrowca, and Galas engaged together in various forms of manipulative trading in ISML common stock, both before and during the promotion of ISML.

35. For example, on April 13, 2012, April 16, 2012, April 19, 2012 and April 20, 1 2012, A. Hawatmeh, Mrowca, and Galas entered “matched orders” and “wash trades” of ISML. Some of the orders were matched with orders entered by a third party, identified herein as “Trader A.”

36. “Matched orders” occur when a person, for the purpose of creating a false or misleading appearance of active trading in a security, enters an order to buy or sell that security with the knowledge that a substantially similar order has been or will be placed to trade the security.

37. “Wash trades” occur when a security is traded between two accounts with no change in beneficial ownership for the purpose of creating a false or misleading appearance of active trading in the security.

38. A. Hawatmeh entered matched orders for ISML knowing that matching orders had been placed or would be placed in the account of Mrowca, Galas or Trader A.

39. A. Hawatmeh entered matched orders for ISML with the intention of creating a false or misleading appearance of active trading in ISML common stock or a false and misleading appearance with respect to the market for ISML common stock.

40. Mrowca entered matched orders for ISML knowing that matching orders had been placed or would be placed in the account of A. Hawatmeh or Trader A.

41. Mrowca entered matched orders and wash trades for ISML with the intention of creating a false or misleading appearance of active trading in ISML common stock or a false and misleading appearance with respect to the market for ISML common stock.

42. Galas entered matched orders for ISML knowing that matching orders had been 1 placed or would be placed by A. Hawatmeh.

43. Galas entered matched orders and wash trades for ISML with the intention of creating a false or misleading appearance of active trading in ISML common stock or a false and misleading appearance with respect to the market for ISML common stock.

44. A. Hawatmeh’s, Mrowca’s and Galas’s matched orders and wash trades affected the market price and volume of ISML stock.

45. Beginning on April 20, 2012, ISML was the subject of an Internet promotional campaign by Mrowca’s stock promotion entity, Money Runners Group LLC, and other promoters. ISML was also promoted by Mrowca on the Investors Hub web site under the user name “HotStockAce.” The promotions urged investors to buy ISML and claimed that ISML would trade at $.20 per share, although there was no news at the company justifying the prediction or the buy recommendation.

46. A. Hawatmeh, Mrowca and Galas had prior knowledge of the ISML promotion and its timing.

47. On April 20, 2012, A. Hawatmeh sold 995,000 shares of ISML at prices ranging from $.124 to $.20 per share.

48. On April 20, 2012, Galas sold 85,000 shares of ISML at prices ranging from $.129 to $.20 per share.

49. A. Hawatmeh’s sales of ISML stock from April 12, 2012 through April 20, 2012 20 generated gross profits of approximately $223,000.

50. Galas’s sales of ISML stock through April 20, 2012 generated gross profits of approximately $15,000.

51. Following the promotion of ISML, the price and volume of ISML stock collapsed. The trading volume of ISML stock on April 20, 2012 was almost 5 million shares with a high price of $.22 per share. By May 20, 2012, the price had declined to $.03 per share and the trading volume was only 33,200 shares.


Extract -
08/05/2014 3 AMENDED COMPLAINT against defendant(s) All Defendants with JURY DEMAND, filed by Securities and Exchange Commission.(Stoelting, David) (Entered: 08/05/2014)
Doc 3 PDF file
http://www.sec.gov/litigation/complaints/2014/comp-pr2014-159.pdf