(STL.News) The Securities and Exchange Commission (SEC) Friday announced charges against Barton S. Ross for his role in a market manipulation scheme in which he and several other individuals created false rumors about public companies in order to profitably trade around the temporary price increases caused by the publication of the rumors.
According to the complaint, filed on December 18, 2020, Ross and several other individuals created false rumors about purported market-moving events, such as corporate mergers or acquisitions, involving publicly-traded companies. As alleged, the false rumors were then shared with other individuals who disseminated the false rumors through real-time financial news services, financial chat rooms, and message boards, causing the prices of the subject companies’ securities to rise temporarily. Between February 1, 2018 and January 2020, Ross allegedly created and traded around the false rumors at least 49 times, generating nearly $36,000 in illicit profits. The other scheme participants also traded around the false rumors, generating significant profits.
The SEC’s Complaint charges Ross with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Ross has agreed to cooperate with the Enforcement Division and has consented to the entry of a judgment that imposes a permanent injunction, with monetary relief to be determined at a later date. The settlement is subject to court approval. In a parallel action, the U.S. Attorney’s Office for the Northern District of Georgia today announced that Ross pleaded guilty to related criminal charges.
The SEC’s investigation, which is ongoing, is being conducted by Martin Zerwitz of the Enforcement Division’s Cyber Unit, and Jonathan Austin, with assistance from Pat McCluskey of the Market Abuse Unit. The investigation is supervised by Deborah Tarasevich; Kristina Littman, Chief of the Cyber Unit; and Joseph G. Sansone, Chief of the Enforcement Division’s Market Abuse Unit. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Northern District of Georgia and the Federal Bureau of Investigation.