DD Support Board and Research Team

[scion]

Trading in ADSU

73. From June 28, 2013 through November 5, 2013, over 6.6 million shares of ADSU common stock was accumulated in A. Hawatmeh’s and N. Hawatmeh’s accounts through market purchases at prices ranging from $.0032 to $.048 per share.

74. The trading in ADSU common stock in N. Hawatmeh’s account was controlled by A. Hawatmeh.

75. From June 28, 2013 through July 22, 2013, A. Hawatmeh’s and N. Hawatmeh’s accounts purchased a total of 3,960,000 shares of ADSU common stock in market trades at prices ranging from $.0032 to $.018 per share. These trades constituted over 90% of the total trading volume of ADSU common stock during that period.

76. On July 2, 2013, the A. Hawatmeh and N. Hawatmeh accounts entered matched orders for 10,000 shares of ADSU common stock that were executed at $.07.

77. ADSU’s price rose from $.009 per share on June 28, 2013 to $.0181 per share on July 22, 2013.

78. On August 23, 2013, the A. Hawatmeh and N. Hawatmeh accounts entered matched orders by which the entire 2,850,000 shares of ADSU common stock in N. Hawatmeh’s account was sold to A. Hawatmeh at $.09 per share.

79. Following the matched orders on August 23, 2013, and through November 5, 2013, A. Hawatmeh purchased an additional 2,905,950 shares of ADSU common stock in market trades at prices ranging from $.005 per share to $.0481 per share.

80. Trading in A. Hawatmeh’s and N. Hawatmeh’s accounts from August 23, 2013 through November 5, 2013, including the matched orders, constituted over 90% of the total trading volume in ADSU during this period. By November 5, 2013, A. Hawatmeh’s account held over 6.6 million shares of ADSU.

81. A. Hawatmeh entered matched orders for ADSU (including orders entered in the N. Hawatmeh account) knowing that matching orders had been placed or would be placed in the A. Hawatmeh or N. Hawatmeh account.

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

83. The matched orders in A. Hawatmeh’s and N. Hawatmeh’s accounts affected the market price and volume of ADSU stock. For example, the 2,850,000 share matched order on August 23, 2013 accounted for 93% of the market volume on that day.

84. On November 7 and November 8, 2013, there was an aggressive promotion of ADSU over the Internet and social media claiming that ADSU would trade at $2 per share. This assertion was baseless since ADSU had no business operations at the time of the promotion.

85. On November 7 and November 8, 2013, A. Hawatmeh sold his entire 6.6 million share position in ADSU at prices ranging from $.045 to $.24 per share.

86. A. Hawatmeh had prior knowledge of the ADSU promotion and its timing.

87. A. Hawatmeh’s sales of ADSU stock from June 28, 2013 through November 08, 2013 generated gross profits of approximately $425,000.

88. On November 8, 2013, B-D 1, through which A. Hawatmeh traded ADSU, froze A. Hawatmeh’s account. At the time of the freeze, the account contained positions in numerous microcap stocks and approximately $486,000 in cash.

89. The trading volume for ADSU common stock on November 7 and 8, 2013 was 4,121,053 shares and 11,897,090 shares, respectively. The price of ADSU common stock peaked on November 7, at $.24 per share. By December 4, 2013, the daily volume of ADSU common stock had declined to approximately 186,000 shares and the price had declined to $.01 per share.


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