The Cayman Islands Monetary Authority has suspended the director registration of Oliver-Barret Lindsay, the owner of CMGT Capital Management and Lindsay Capital Corp. SEZC.

Lindsay, a Canadian citizen, was charged in July 2018 by the Securities and Exchange Commission and in a separate criminal case in the Southern District of California for his alleged involvement in a series of penny stock fraud schemes.

The Cayman Islands-based broker, together with California-based stock promoter Gannon Giguiere and three others, is accused of having participated in penny stock pump-and-dump schemes that purportedly netted the defendants $1.57 million in proceeds.

In a letter sent on 14 June, CIMA suspended Lindsay’s director registration stating that in its opinion Lindsay was carrying on business in a manner detrimental to the public interest and in contravention of the Director Registration and Licensing Law. In addition, Lindsay was not “a fit and proper person to hold a position as a registered director”.

In one of the schemes, Kelvin Medical Inc, a purported medical device company, controlled by Giguiere, allegedly issued 1.5 million shares each to two nominee entities controlled respectively by Giguiere and Lindsay.

The SEC and the criminal complaint allege that the two then coordinated matched trades to create the false appearance of active trading in the stock and cause the company’s share price to rise from zero to $1.20 per share.

At the same time, the SEC said Kelvin Medical stock was promoted on TheMoneyStreet, a website controlled by Giguiere, without disclosing his ownership of the shares.

According to the indictment, Giguiere and Lindsay coordinated their matched trades through an associate, who unbeknownst to them, was a cooperating witness with the Federal Bureau of Investigation, which in an undercover operation recorded encrypted messages and telephone conversations between the defendants.

In April, both defendants pleaded not guilty to a superseding indictment. The court is currently dealing with pre-trial motions in the case. A substantive motion hearing is set for 5 Aug.

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