SEC Secures Eight Figure Judgment Against Unregistered Penny Stock Dealer In Florida
On December 21st, 2022, the Securities and Exchange Commission (SEC) published an official litigation release announcing that an eight figure judgment has been obtained against a penny stock dealer in Florida. Justin W. Keener—who did business as JMJ Financial—has been ordered to pay $10.2 million. Below, our Miami penny stock fraud attorneys discuss the judgment obtained by the SEC in more detail.
Unregistered Penny Stock Dealer Sold Discounted Shares to Unsuspecting Investors
The case against Justin W. Keener and JMJ Financial was filed in the United States District Court for the Southern District of Florida. According to allegations raised by the SEC, Mr. Keener acted as an unregistered penny stock dealer between 2015 and 2018. The SEC contends that Mr. Keener purchased short-term debt from troubled micro cap companies that were in desperate need of funding. He then used his position to convert his holdings into penny stock shares. More than $20 million worth of discounted shares were sold to unsuspecting investors in Florida and other places.
In January of 2022, the court had previously ruled in favor of the SEC on a preliminary matter—finding that Mr. Keener had indeed been operating as an unregistered penny stock dealer in relation to his association with JMJ Financial. Justin W. Keener has now been ordered to pay $10.2 million in civil damages, including disgorgement of more than $7.7 million in ill-gotten gains.
Allegations: Why Penny Stock Offerings are Potentially Risky Investments
Penny stocks are low-priced stocks. These securities are often traded outside of major stock exchanges. They are typically issued by smaller and/or newer companies that often lack a not have track record of financial performance or stability. Penny stock offerings are often risky investments.
One reason penny stocks are risky is because they are often highly volatile and can fluctuate significantly in value over a short period of time. This volatility can be caused by a variety of factors, such as changes in market conditions, company news, or investor sentiment. Even a penny stock being operated the right way may still not be suitable for most investors.
Another reason penny stocks are risky is because they are often subject to manipulation and fraud. Some penny stock companies may engage in practices such as issuing false or misleading information to boost the price of their stock, or insider trading to manipulate the market. This can lead to significant losses for unsuspecting investors.
Contact Our Miami, FL Penny Stock Fraud Lawyers for a Confidential Case Review
At Carlson & Associates, P.A., our South Florida securities fraud team has the skills and expertise to handle the full spectrum of penny stock fraud claims. If you or someone you know suffered financial losses as a consequence of penny stock fraud, we are more than ready to help you secure justice and compensation. Contact us now to request a completely confidential consultation with an attorney. We fight for investors in Miami, Southeast Florida, and beyond.
Source:
sec.gov/litigation/litreleases/2022/lr25598.htm