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Replies to post #7512 on Spencer Pharmaceutical (SPPH)
Wednesday, November 19, 2014
SEC target Jean-Francais Amyot failed to appear for the first day of his jury trial in Boston Monday morning.The SEC claims that he was behind the mani pulation of pink sheets listing Spencer Pharmaceuticals Inc.
by Mike Caswell
QUEBEC'S JEAN-FRANCOIS Amyot was a no show at his pump and dump trial in Boston on Monday. The hearing,which includes a jury, was to begin Monday and continue for several days until the jury decided allegations that Mr. Amyot had run a $5.8-million market manipu lation. (All figures are in U.S. dollars.). Mr. Amyot was not present at the start of the day, and after waiting just 15 min utes the judge decided that he was not going to arrive. The judge then declared him to be in default, a finding that will likely result in him losing the case.
Pharma Exec Can't Duck SEC's Pump-And-Dump Suit
By Stewart Bishop
Law360, New York (November 14, 2014, 6:38 PM ET) -- The Canadian man behind Spencer Pharmaceutical Inc. must face charges from the U.S. Securities and Exchange Commission of spreading fictitious reports of a $245 million buyout to inflate stock prices, a Massachusetts federal judge said Friday, rejecting the man's bid to evade U.S. jurisdiction.
After revisiting the issue of jurisdiction ahead of a trial scheduled to begin Monday, U.S. District Judge Indira Talwani said given the SEC’s allegations that Spencer director Jean-Francois Amyot deceived investors into believing that Spencer was a U.S.-based company and considering he set up a “virtual office” in Boston, there is enough proof that Massachusetts is the proper venue to adjudicate charges that Amyot violated the Exchange Act of 1934.
Since the SEC satisfied jurisdiction under the Exchange Act, that is sufficient to establish a proper venue for other securities violations as well, Judge Talwani said in a written order.
“Accordingly, plaintiff SEC’s satisfaction of the venue provision of the Exchange Act is sufficient to establish that Massachusetts is an appropriate venue for the claims brought in this suit,” the judge said.
The agency claims the scheme was orchestrated by Amyot and Spencer directors Maximilien Arella and Ian Morrice, who allegedly began disseminating false press releases in November 2010 claiming a Mideast company had made an unsolicited bid to buy Spencer.
The trio collaborated with IAB Media Inc. and Hilbroy Advisory Inc., two public relations companies controlled by Amyot, to distribute the press releases and create a promotional campaign to drum up publicity for the alleged buyout offer, the complaint says. Spencer billed itself as a cutting-edge biotech firm but in reality had no business operations other than a research contract with a university in Montreal to develop technology related to a failed U.S. patent covering drug absorption.
As a result of the pump-and-dump campaign, the SEC says, Spencer’s stock more than doubled in the span of two days while its trading volume reached 6 million shares on Nov. 11, 2010 — a different stratosphere than the 50,000 shares Spencer was averaging in the three months prior to the buyout rumors.
The SEC says Amyot collected over $5.8 million from selling 36 million Spencer shares.
Amyot, who had been represented by counsel but is now appearing pro se, argued that jurisdiction in this case was precluded by the U.S. Supreme Court’s decision in Morrison v. National Australia Bank, which barred federal securities fraud actions for securities traded on foreign exchanges. He claimed Spencer’s stock was traded on OTC-Links, which is not an exchange as defined in Morrison.
However, Judge Talwani said Amyot was misapplying Morrison because the court in that case ruled that extraterritorial application of law was related to whether the allegations the plaintiff makes entitles it to relief, not whether the court had the power to hear the case.
Amyot and the SEC could not be reached for comment Friday.
Arella and Morrice settled with the SEC in September, agreeing to pay $50,000 each in penalties, and to five-year bans from serving as officers and directors of public companies.
Amyot, Morrice and several other associates are also facing charges from Quebec financial regulator Autorite des marches financier over alleged market manipulation involving Spencer and multiple other companies.
The SEC is represented in-house by Rua M. Kelly and James R. Drabick.
Amyot is appearing pro se.
The case is U.S. Securities and Exchange Commission v. Spencer Pharmaceutical Inc. et al., case number 1:12-cv-12334, in the U.S. District Court for the District of Massachusetts.
--Editing by Edrienne Su.
