SEC Charges Stock Promoter with Defrauding Investors Seeking Pre-IPO Facebook and Twitter Shares

The SEC charged a stock promoter with fraud in a scheme involving the purchase of Facebook and Twitter shares prior to their initial public offerings.

The SEC alleged that, instead of purchasing the shares in the secondary market as promised, the stock promoter and his firm, Prima Capital Group, used the money primarily for the day trading of stocks and options, as well as to pay off certain investors who complained when they didn't receive the promised Facebook or Twitter shares.

Additionally, the SEC announced administrative proceedings against a registered representative who had a side agreement with the stock promoter to solicit investors and who received 50 percent of the markup on the Facebook shares that he sold.

See: SEC Complaint against Argyropoulos and Prima Capital Group; SEC Order: Eldaher.