43. Matt Brown, Joseph Mangiapane, and Marc Riviello planned the Asia Global pump-and-dump scheme in August 2006 with a representative of Asia Global. They used Dynkowski, whom Brown knew from InvestorsHub.com, to conduct the manipulative trading.
44. In this scheme, as with GH3, Dynkowski and his associates pumped the price of Asia Global's stock through manipulative trading and misleading or touting press releases. Mangiapane and Riviello used their positions as registered representatives at AIS to open a series of nominee accounts for this scheme. Dynkowski and Brown used these nominee accounts to sell millions ofshares obtained from the issuer which were purportedly registered on Form S-8. The purpose ofForm S-8 (a short fmm registration statement) is to register an offering ofsecurities by an issuer under an "employee benefit plan." The shares issued in this pump-and-dump scheme did not qualify for registration on Form S-8. Accordingly, this was an unregistered offer and sale of securities that was not subject to a valid exemption from registration.
45. This pump-and-dump scheme occurred in three cycles: August-September 2006, November-December 2006, and January-February 2007. The total proceeds of the fraud were $4,050,529.
46. Defendant Nathan Michaud, a trader whom Dynkowski had previously met through InvestorsHub.com, also participated in this scheme. In August and September 2006, Dynkowski and Michaud, as well as others, engaged in wash sales, matched orders, and other manipulative trading to generate phony volume and artificially inflate Asia Global's stock price. When the scheme began, Asia Global traded for approximately 11 cents per share. Starting on August 9,2006, Dynkowski and Michaud began to pump the stock using wash sales, matched orders, and other manipulative trading. Dynkowski and Michaud continued their manipulative trading through the end of September 2006.
47. This manipulative trading artificially inflated Asia Global's stock price. In the space of thirteen trading days, the price of Asia Global's stock rose from 11.5-cents per share at the close ofthe market on August 9, 2006, to an intraday high of 41 cents per share on August 25,2006. Asia Global's daily volume likewise jumped by millions of shares per day during this period.
48. In the midst of the steep climb in its stock price, Asia Global directed its transfer agent on August 21,2006 to transfer 7.75 million shares purportedly registered on Form S-8 into the nominee accounts at AIS. These 7.75 million shares represented approximately 25% ofAsia Global's issued and outstanding shares. Brown and Dynkowski controlled the subsequent sale ofthese shares by giving sell orders to Mangiapane and Riviello, registered representatives at AIS who knew (or were reckless in not knowing) that these sales were the dump phase ofthe scheme. Between August 30 and September 5,2006, they sold 7.75 million shares from the nominee accounts at AIS, resulting in illicit profits of $1 ,331,118.
49. While Dynkowski and Brown were selling shares from the nominee accounts, Dynkowski instructed Brown on August 24, 2006 to have Asia Global issue a press release hyping the company's second quarter 2006 financial results. Dynkowski told Brown to "make it sound good... like AAGH [Asia Global] announces record revenue net profits [sic]" and suggested that the press release state that the company's profits had increased by at least 300%. Dynkowski urged Brown to "make it sound ENORMOUS." On September 1,2006, two days after Dynkowski and Brown began selling the 7.75 million shares in the nominee accounts, Asia Global issued a press release claiming that its net income for the second quarter of 2006 had increased by 370% coJ,npared to its net income in the second quarter of2005 and that its profits for July 2006 were 745% greater than its profits for July 2005. Dynkowski timed his manipulative trading to coincide with the publication ofthis press release.
50. The Defendants repeated this scheme with Asia Global in November and December 2006. On October 27, 2006, the company filed another Form S-8 with the Commission. Asia Global thereafter had its transfer agent issue another 25 million shares to most of the same nominee accounts at AIS that were used in the prior round. Again, this was an improper use ofa Form S-8. These 25 million shares represented 45% of Asia Global's issued and outstanding shares at the time.
51. In this second cycle ofthe scheme, Dynkowski again began a manipulative trading campaign using wash sales, matched orders, and other manipulative trading.
52. As in the prior pumps, Dynkowski timed the manipulative trading to coincide with company press releases. He personally wrote press releases for Asia Global during this cycle, including the "Shareholder Update" issued on November 8, 2006. That press release used the same misleading NOBO tactic that Dynkowski used for GH3 one month later, and it also claimed that "July 2006 profits were up 745% over the previous years [sic] July profits." After manipulating the price of the stock, Dynkowski and Brown, through orders submitted to Mangiapane and Riviello, sold the 25 million shares held in the AIS nominee accounts at an average price of about $0.056 per share in November and December 2006. These sales yielded illicit proceeds of $1,485,704.
53. The final cycle ofthe scheme took place in January and February 2007. On January 31,2006, Asia Global filed another Fonn S-8 for 30 million shares. That same day, Asia Global requested that its transfer agent issue 26,500,000 ofthese shares to largely the same group of nominee accounts at AIS as in the previous two rounds. These transfers, which represented approximately 32.5% ofAsia Global's issued and outstanding shares, constituted an improper use of Form S-8.
54. On January 16, 2007, when Asia Global's stock opened at $0.06 per share, Dynkowski and his associates began to manipulate the stock. They matched orders and executed wash sales in order to artificially inflate the stock's price. By the end of January 2007, Asia Global's stock price had more than doubled (with an intraday high of $0.152 on January 23,2007).
55. Additionally, on February 6, 2007, Asia Global issued a press release claiming that its subsidiary had just received a license to produce 104 episodes of "Who Wants to Be a Millionaire" in China. The volume of trading in Asia Global on February 6 increased by more than 65%. That day alone Dynkowski and Brown, through orders submitted to Mangiapane and Riviello, were able to sell approximately 5.5 million shares held in nominee accounts, representing approximately 25% ofthe total volume that day.
56. From February 2 through February 8, Dynkowski and Brown, through orders submitted to Mangiapane and Riviello, sold approximately 24.5 million shares held in the nominee accounts, making illicit profits of$1,233,707.
57. Brown, Dynkowski, Mangiapane, Michaud, Riviello, and Asia Global (or its representatives) divided the $4 million in illicit proceeds from the scheme.
Dumb legal question: Why is this titled "FACTS" and not "ALLEGATIONS" or something else?
FACTS
GH3 InternationaL Inc.
29. GH3 is a Nevada...
Because the government lawyers present something to a court, does that automatically make it "FACT" or what?
I have a vague understanding of the phrase "The Facts of the Case..." but I thought a court had to decide what's factual or not and that defendants be given an opportunity via discovery and the interrogatory process to rebut the "facts" of a case as presented by the other side...
But I really don't know much about it and wanted to ask.
Market Data 
Markets 
AI
