CHICAGO, July 21, 2014 (GLOBE NEWSWIRE) -- The Securities Arbitration Law Firm of Stoltmann Law Offices announced today that it is investigating potential FINRA arbitration claims arising out of an elaborate pump-and-dump scheme involving shares of four companies: CodeSmart, Cubed, Inc., The Staffing Group Ltd., and StarStream Entertainment Inc. The scheme was allegedly carried out by a group including financial advisors Matthew A. Bell and Craig L. Josephberg. Bell was associated Securities America, Inc. and WFG Investments, Inc. in San Antonio, Texas. Josephberg was associated with Halcyon Cabot Partners and Meyers Associates, L.P. in New York, NY.
A pump-and-dump scheme is a scheme that fraudulently creates the appearance that a microcap or penny stock is "hot". The schemers artificially pump up the price of a stock by matching buy and sell orders to create the appearance of increasing demand and artificially increase the price. As the price rises, brokers purchase the stock for their customers' accounts. Once the price is high enough, the schemers dump the remaining shares they own and the price of the stock, for which there is no real demand, falls precipitously.
From late 2012 to the present, Bell and Josephberg allegedly used their control over their customers' accounts to drive up the price of shares in these companies. Bell and Josephberg allegedly purchased shares of stock in CodeSmart, Cubed, StarStream, and The Staffing Group for their customers' accounts even while they were selling all of the shares in their own accounts. Bell and Josephberg allegedly each received more than $500,000 for their involvement in the scheme. The U.S. Securities & Exchange Commission has filed a civil action against Bell and Josephberg and others. Bell and Josephberg have also been indicted by the U.S. Attorneys' Office for the Eastern District of New York.
According to Chicago investment fraud lawyer Andrew Stoltmann, "Brokerage firms like Securities America, Inc., WFG Investments, Inc., Halcyon Cabot Partners, and Meyers Associates have a duty to reasonably supervise the activities of their financial advisors. Firms must perform due diligence on investments recommended to clients. Failure to do so can make the brokerage firm liable for their customers' losses. To learn about how you might be able to recover losses from this scheme through FINRA arbitration on a contingency fee basis, please call our securities fraud law firm for a free evaluation."
To learn about recovering these losses on a contingency fee basis through FINRA claims, lawsuits or class action lawsuits, please visit www.PonziRecoveryCenter.com or call our securities fraud team at 312.332.4200 in Chicago, Illinois.