Former Employees Settle SEC Charges Involving Unregistered Sales of Penny Stocks

The SEC announced that three former supervisory employees of a penalized company named in an enforcement action have agreed to settle charges stemming from the unregistered sales of billions of shares of penny stocks on behalf of a single customer. The SEC's orders found that the previous employees failed to make the requisite inquiry into the facts behind the sales despite prominent red flags associated with the sales.

Associate Director of the SEC Division of Enforcement Scott W. Friestad stated that "these actions show the SEC's resolve in holding responsible individuals, including senior managers, when they violate the securities laws."

See: SEC Press Release.Related news: SEC and FinCEN Charge Broker-Dealer Separately with Securities Law and BSA Violations Relating to Improper Penny Stock Sales (January 27, 2015).