A penny stock manipulator has been fined $500,000 for pumping up the price of a start-up company, the Securities and Exchange Commission announced Friday.
Gregory M. Bercowy of St. Petersburg, Fla., was ordered to pay the fine and was barred from any future dealings in penny stocks by a U.S. district court in Florida.
For less than two weeks in August 2016, Bercowy manipulated the stock price of Aureus Inc., a penny stock company incorporated in Nevada, the SEC said. At the time, he was associated with a Florida state registered investment advisor.
Bercowy sold shares of certain Fortune 500 companies, including Merck & Co., Abbott Laboratories and Apple, in a relative's brokerage account in order to buy over 3 million shares of Aureus at a total cost of more than $2.8 million. Aureus described itself as a start-up company involved in mineral exploration but it had no mining operations, the SEC said.
According to the SEC’s complaint, Bercowy entered, and later canceled, a large number of orders to buy Aureus shares at prices higher than the then-current price of the stock in order to boost the stock price. The price per share of Aureus securities increased from $0.52 on August 4 to $1.62 on August 16.
Some of his trading included “buy limit orders,” meaning he wanted to buy at the designated limit price or lower. He then canceled the orders within seconds or minutes, boosting the price, the complaint said.
Bercowy stated in recorded phone calls with a representative of a brokerage firm that he and others were trying to boost Aureus's stock price, the SEC said. The complaint does not say whether he actually made any money on the trades.