Friend's name used by a pump and dump (without his knowledge)

[quincy]

I appreciate the response, but, what would I have to gain by lying?

Everything I am saying is factual. Happy to provide mods with any proof to support the same. The absurdity and blatant disregard of securities law was shocking to the State Bar representative I spoke with as well. She figured it might fall under tort law but grappled with it as well.

And yes, the company is still trading publicly.

You tell a fantastic tale, pweasehelp, whether it is true or not.

You said your friend lives in Central America and the nefarious acquaintance lives in Nevada. Where do you live?

Your friend probably will want to consult with an attorney in Nevada if he is looking for a legal solution, as that is where the acquaintance lives. Your friend in Central America can explain to the Nevadan attorney or attorneys he contacts how he came to be involved with the fellow in Nevada in the first place, and he can explain to the Nevadan attorney(s) what exactly he hopes to accomplish.
Good luck.

 

[pweasehelp]

You tell a fantastic tale, pweasehelp, whether it is true or not.

You said your friend lives in Central America and the nefarious acquaintance lives in Nevada. Where do you live?

Your friend probably will want to consult with an attorney in Nevada if he is looking for a legal solution, as that is where the acquaintance lives. Your friend in Central America can explain to the Nevadan attorney or attorneys he contacts how he came to be involved with the fellow in Nevada in the first place, and he can explain to the Nevadan attorney(s) what exactly he hopes to accomplish.
Good luck.

Thank you, I'll reach out to a few attorneys and see who bites.

Really appreciate everyone's input on this.

 

[quincy]

Thank you, I'll reach out to a few attorneys and see who bites.

Really appreciate everyone's input on this.

Good luck to your friend.

 

[zddoodah]

1. Go directly to the SEC. However, what happens to his legal expenses so far?

I don't understand the question and have no idea what "pump and dump" means. Nor is it clear what the purpose was of the "acquaintance" "stating that [your friend] basically controls, owns and manages [some] company" or why that's resulted in your friend incurring $10,000+ in attorney fees for a couple of demand letters.

2. File a case in the U.S. for fraudulent use of his name and the damage to his reputation (by being associated with a pump and dump)

"Fraudulent use of a name" is not a recognized cause of action, and it's not clear how your friends reputation was damaged as a result of an SEC filing that virtually no one likely read -- especially since your friend apparently isn't a U.S. resident. Also, how is it that the "John Smith" mentioned in the filings is clearly identifiable as your friend, as opposed to the dozens or hundreds or thousands of people who have the same name.

His local lawyer has suggested #2, but he can't practice in the U.S.

Why would your friend hire a non-U.S. attorney for this? And why is this non-U.S. lawyer making recommendations about a U.S. legal matter?

The lawyer that the State Bar recommended basically asked for money upfront to even look into the case.

That's normal.

Is there anyone that would take a case like this on contingency?

Unlikely.

Where do I find them?

You don't. This has nothing to do with you.

It seems massively unfair that my friend gets defrauded

It's a huge jump from using his name in an SEC filing to "fraud."

 

[pweasehelp]

I don't understand the question and have no idea what "pump and dump" means. Nor is it clear what the purpose was of the "acquaintance" "stating that [your friend] basically controls, owns and manages [some] company" or why that's resulted in your friend incurring $10,000+ in attorney fees for a couple of demand letters.

Thank you for the response.

"Pump and dump" in this context (like most other) means they list a penny stock in OTC markets. Then, they make fake press releases to pump up the stock, thereafter liquidating their own position to the public at inflated prices.

"Fraudulent use of a name" is not a recognized cause of action, and it's not clear how your friends reputation was damaged as a result of an SEC filing that virtually no one likely read -- especially since your friend apparently isn't a U.S. resident.

If anyone looks up his name in the future, it will be associated with this obvious scam.

Considering they made fake PR releases to inflate the stock, it was definitely read by people in the public market. There's tons of discussion about the stock in investing forums as well.

Worse yet, he already had a bank account application denied. While the bank wouldn't disclose why, my hunch is that this association with a public company might have been the reason.

Basically, they pumped the stock, liquidated their position, and pinned the entire thing on my friend who was oblivious to use of his name.

Also, how is it that the "John Smith" mentioned in the filings is clearly identifiable as your friend, as opposed to the dozens or hundreds or thousands of people who have the same name.

There's no one else with this name. Trust me.

Further, the filings listed a random address in the same country where my friend is based for any notices. The address did not belong to him.

Plus they sent him backdated documents to sign, so he was clearly the intended target. This is beyond a doubt.

Why would your friend hire a non-U.S. attorney for this? And why is this non-U.S. lawyer making recommendations about a U.S. legal matter?

We aren't based in the U.S., we didn't have any direction.

You don't. This has nothing to do with you.

I understand, I'm just trying to help him find the best course of action.

It's a huge jump from using his name in an SEC filing to "fraud."

If you read the specifics above, do you still think so?

 

[Just Blue]

Is it just "his" name or are they using other identifying information associated with him?

 

[quincy]

I don't understand the question and have no idea what "pump and dump" means ...

... "Fraudulent use of a name" is not a recognized cause of action ...

“Pump and dump” is a fairly well-known phrase used for a securities fraud where the prices of stocks are artificially (deceptively, falsely) inflated so currently-held stocks can be sold by stock holders at a higher price.

The causes of action for fraudulent uses of a name can include identity theft and defamation.

 

[zddoodah]

"Pump and dump" in this context (like most other) means they list a penny stock in OTC markets. Then, they make fake press releases to pump up the stock, thereafter liquidating their own position to the public at inflated prices.

And why exactly would listing your Central American friend as the controlling shareholder have any impact on this?

If anyone looks up his name in the future, it will be associated with this obvious scam.

I doubt that. The content of SEC filings does not come up in the average Google search.

There's no one else with this name. Trust me.

I trust/believe that you believe this. But I don't believe you're correct.

If you read the specifics above, do you still think so?

Yes.

I don't think your friend suffered any damages or has any viable legal claim. Your friend can write to the SEC and explain that whatever was written in the documents is untrue. Until and unless something actually happens to him as a result, I don't see the point in doing anything else.

 

[quincy]

The friend could be subject to hefty fines, among other problems, if connected to a pump and dump scheme.

The friend might want to file his own FINRA complaint against the company supposedly under his control, as a way to initiate an investigation. I don’t advise doing this without consultation with a lawyer first, however.

https://www.finra.org/investors/have-problem/file-complaint/complaint-center

 

[Litigator22]

. . . . . . what would I have to gain by lying?

Why? Might the less credulous listener suspect for the purpose of appeasing a desperate need for attention?

Like too many cooks can spoil the broth, over embellishing can ruin a good story. And like "once upon a time" many of which begin with "a friend of mine . . . "

Fini