Oliver Lindsay has been sentenced to 17 months in prison for participating in a pump-and-dump stock fraud scheme.
The Securities and Exchange Commission brought charges in 2018 against Lindsay, who was a Cayman Islands-based broker at the time, and stock promoter Gannon Giguiere, following an FBI undercover operation.
Giguiere, from Laguna Beach, California, received a 12-month sentence.
Lindsay, from Vancouver, Canada, and Giguiere pleaded guilty to the charges in 2019.
Giguiere admitted to manipulating the market for the stock of Kelvin Medical, Inc., a small medical device company.
Giguiere conspired to pump up the price and volume of the stock through manipulative trading and a stock promotion website designed to get unwitting investors interested in buying the stock. After the stock price rose and he dumped the shares, Giguiere pocketed more than US$1.4 million in fraudulent proceeds from these schemes, the Department of Justice said in a press release.
Lindsay admitted that he engaged in manipulative trading with the same goal – to artificially increase the price and trading volume of Kelvin Medical stock.
Both had matched their trades through an individual who, unbeknownst to them, was a cooperating witness with the FBI.
Lindsay was at the time the principal of CMGT Capital Management, a Cayman Islands exempt broker-dealer registered with the Cayman Islands Monetary Authority. He also owned Lindsay Capital Corp. SEZC, an investor relations services firm in Cayman’s special economic zone.
CIMA suspended Lindsay’s director registration in October 2018 and cancelled it in June 2019.
In handing down the sentence, US District Judge William Q. Hayes ordered defendants to make restitution payments to victims of their scheme in the amount of $187,893.43.
“These are fitting sentences for defendants who caused significant harm to investors,” said US Attorney Randy Grossman. “I trust that this will deter others who would participate in schemes that harm the integrity of the United States financial markets.”
In July 2021, Lindsay was charged again by the SEC, this time with insider trading in the stock of Long Blockchain Company, formerly known as Long Island Iced Tea Co.
Lindsay allegedly passed on material non-public information from a corporate insider about the company’s plans to switch its beverage business to blockchain technology to Giguiere, who then bought 35,000 shares in the company.
In the case, Lindsay consented to the imposition of permanent injunctive relief regarding the SEC’s claim against him. The payment of disgorgement of ill-gotten gains and a civil penalty has yet to be decided.
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