Gendarme Capital Corporation and 2 executives were charged with carrying out an illegal stock distribution scheme; a Greenwich, NY lawyer allegedly issued false legal opinion letters. The SEC alleges that Gendarme repeatedly acquired deeply discounted shares from penny stock issuers under the pretense of a long-term investment and then dumped the shares into the market, essentially effecting public stock distributions without complying with the disclosure requirements of the federal securities laws.
Through its two principals – CEO Ezat Rahimi of Elk Grove, CA, VP Ian Lamphere of Lawrenceville, VT – Gendarme sold more than 15 billion shares of at least a dozen companies, netting illicit profits of more than $1.6 million.
Details:
Gendarme repeatedly acquired deeply discounted shares from penny stock issuers under the pretense of a long-term investment and then dumped the shares into the market, essentially effecting public stock distributions without complying with the disclosure requirements of the federal securities laws. The SEC alleges Gendarme began entering into agreements with penny stock issuers in early 2008. The agreements gave Gendarme the right to purchase stock at 30 to 50 percent discounts to the market price. The SEC alleges that, in an effort to avoid the registration and disclosure obligations of the federal securities laws, Gendarme falsely represented to issuers that it was purchasing shares for “investment purposes only.” Contrary to those representations, Gendarme quickly dumped most of these shares on the public markets. Through its two principals – CEO Ezat Rahimi of Elk Grove, Calif., and vice president Ian Lamphere of Lawrenceville, Vt. – Gendarme sold more than 15 billion shares of at least a dozen companies, netting illicit profits of more than $1.6 million.