The new CEO of Cayman Airways Patrick Strasburger says he resigned from a previous company he was CEO, president and director of when he found out that it was involved in a US$2.3 million pump and dump scheme.
In fact, it was Mr. Strasburger who reported the scheme to the Securities and Exchange Commission, he said when questioned by The Caymanian Compass on a lawsuit filed by the SEC against LASV Enterprises, Inc.
Mr. Strasburger explained that he had only been with the company for about three months in 2000, following on from a period of contract work for them.
‘When I discovered what was going on I immediately turned it over to the SEC to investigate,’ he said.
Mr. Strasburger had only taken up his post in June of 2000, before resigning the following October after discovering the fraudulent scheme.
Three or four of those involved in the scheme were sent to prison, Mr. Strasburger said.
Pump and dump is a term used to describe financial fraud, in which the stock of a company is inflated artificially through untrue or exaggerated promotion in order to sell stock at an inflated price. When the promotion stops or is uncovered, the investment price collapses, leaving investors with a loss.
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