A Hawaii man has been charged by the U.S. Securities and Exchange Commission for allegedly running a $35 million international stock scheme.
The SEC said Nicholas Louis Geranio “covertly set up companies and manipulated the market for their stock to profit from aggressive offshore boiler room activity.” The alleged fraudulent activity happened between April 2007 and September 2009.
Also charged in the complaint is Keith Michael Field of California.
"Geranio pulled the strings while Field scripted the show for the boiler rooms to bring a payday to everyone but the investors," SEC official Stephen L. Cohen said in a statement.
The complaint says the boiler rooms — teams of unregistered telemarketers operating mostly from Spain — “used high-pressure sales tactics and material false statements and omissions to induce the investors (many of them elderly and located in the United Kingdom) to buy the [stock]. Based on a structure created by Geranio, the boiler rooms directed the investors to send their money to escrow agents in the U.S.”
The SEC said those agents, under Geranio’s oversight, then paid 60 perent to 75 percent of the approximately $35 million raised to the boiler rooms as their sales markups, kept 2.5 percent as their own fee, and paid the remaining proceeds back to the companies that Geranio created.