3. Power Traders Press’s and Elite Stock Research’s manipulative conduct included
“marking-the-close” and executing “matched” and “wash” trades that were designed to
artificially raise the securities’ market prices and trading volumes, and give the false appearance
of active trading.
4. Power Traders Press and Elite Stock Research then engaged in large-scale
promotional campaigns touting these securities, typically targeting the vulnerable – elderly and
unsophisticated investors. Power Traders Press’s and Elite Stock Research’s boiler room “sales”
personnel, including Erik Matz, Hardy, Vassallo, Heepke, Verderosa, Cohen, Ramirez, and
Antos (“Boiler Room Defendants”), contacted hundreds of individuals across the United States
seeking to induce investment in these securities, often by employing high-pressure tactics such as
threatening potential investors and flooding them with emails and phone calls.
5. The Boiler Room Defendants fraudulently promoted these securities, soliciting
victims to purchase them while failing to disclose that Elite Stock Research’s and Power Traders
Press’s sole reason for aggressively soliciting investment in these securities was the boiler
1 “‘Boiler room’ activity consists essentially of offering to customers securities of certain
issuers in large volume by means of an intensive selling campaign through numerous salesmen
by telephone or direct mail, without regard to the suitability to the needs of the customer, in such
a manner as to induce a hasty decision to buy the security being offered without disclosure of the
material facts about the issuer.” SEC v. R.J. Allen & Assocs., Inc., 386 F. Supp. 866, 874 (S.D.
Fla. 1974).
Case 1:17-cv-04133 Document 1 Filed 07/12/17 Page 3 of 61 PageID #: 3
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rooms’ plans to profit from the victims’ purchases. Indeed, Power Traders Press, Elite Stock
Research, and the Boiler Room Defendants were compensated for promoting these securities,
and they and/or their co-Defendants owned the stock they were promoting and intended to match
the victims’ purchases with sales that continued to artificially inflate the price and produced
fraudulent profits for themselves (referred to as “scalping”).
6. Rather than disclose these material facts, the Boiler Room Defendants
fraudulently promoted these securities to victims as solid investments, often making material
misstatements to victims, including that the securities were “guaranteed winners” and were a
“buy of a lifetime.” Certain Boiler Room Defendants also affirmatively misrepresented their
credentials and the nature of their compensation.
7. As a result of these fraudulent schemes, Elite Stock Research, Power Traders
Press, the Orchestrator Defendants, and the Boiler Room Defendants were able to “pump” the
price of these securities such that they realized millions of dollars in illegal proceeds when they
sold, or “dumped,” these securities at artificially high prices. Meanwhile, the unsuspecting
victims lost millions
AI
