Andrew McAlpine, a penny stock broker formerly based in the Cayman Islands, is set to plead guilty to charges of securities fraud.
A change of plea hearing is scheduled for 22 April in the Federal District Court of Southern California.
US authorities arrested McAlpine for alleged stock fraud in September 2020 in Orlando, Florida, when he was in transit from Grand Cayman to Canada.
The Canadian citizen and three other defendants are facing charges of conspiracy to commit securities fraud, securities fraud and manipulative securities trading.
The indictment alleges the stock fraud ring carried out pump-and-dump schemes with the stocks of VMS Rehab Systems and Argus Worldwide. The fraud allegedly involved the defendants trading in the securities among themselves to create the appearance of active trading and induce investors to buy the stocks at inflated prices.
According to the indictment, McAlpine deposited some of the shares in his offshore brokerage account in the name of Dunstaffnage Corporation with Seven Mile Securities in the Cayman Islands.
McAlpine was previously a former vice president of Legacy Global Markets, S.A., a now-defunct broker-dealer in Belize that was charged by the US Securities and Exchange Commission in 2015 with offering and selling unregistered penny stocks in the public markets.
In that case, Legacy was charged together with Caledonian Bank and Caledonian Securities in the Cayman Islands, Belize-based Clear Water Securities and Panama-based Verdmont Capital S.A.
In 2017, a default judgment by the US District Court for the Southern District of New York ordered Legacy to pay $14.9 million in disgorgement, interest and civil penalties, and imposed a permanent penny stock bar against the broker.