SEC Fraud

The SEC announced today that it has frozen the profits from a trans-atlantic Pump and Dump scheme involving a company located in Washington, GHL Technologies, Inc. Its CEO, Gene Hew-Len, was also charged in the matter for issuing false press releases, and Francisco Abellan (aka. Frank Abel) for coordinating the scheme by mailing glossy brochures and mailings to two million US recipients.

GHL Technologies, later renamed to NXGen Holdings, Inc, installs GPS-based navigation equipment and its share price doubled after the promotional scheme. GHL also issued millions of shares to entities specified by Abellan and those entities sold their shares following the falsified report touting new contracts and millions in revenue.

The lesson here is that if you receive a promotional mailing tell you how awesome a stock is, chances are you should avoid it at all costs.

Following this concerted promotion campaign, GHL’s stock price doubled and trading volume spiked nearly 1,500 percent. Abellan and his entities sold their GHL stock holdings for profits in excess of $13 million. The stock, which reached a high of nearly $9 per share at the height of the scheme, now trades at under a penny.