Forget about illegal naked short selling and other hedge fund
profiteering schemes that may have brought down the world
economy. The United States Securities and Exchange Commission
has more important matters occupying its attention.
In a complaint filed in Delaware by the SEC, InvestorsHub.com
founder and operator Matthew Brown and seven others were accused of
a pump-and-dump scheme in 2006 involving GH3 International, Inc.
and Asia Global, in two separate incidents. Brown is accused
of being a "liaison" between the accused in the GH3 incident, where
the participants "used wash sales, matched orders, and other
manipulative trading, timed to coincide with false, misleading and
touting press releases by the company, to inflate the price of GH3
stock." The group is suspected to have made off with $747,609
from the GH3 trades.
In a separate incident, Brown orchestrated a pump-and-dump
scheme with broker-dealers in California who "met through
InvestorsHub.com, pumped the price of Asia Global stock using wash
sales, matched orders and other manipulative trading, coordinated
with false, misleading, and touting press releases by the
company."
The complaint alleges that "the illicit proceeds from this
scheme totaled at least $4,050,529."
InvestorsHub.Com, Inc. is a wholly-owned subsidiary of ADVFN,
which trades on the London Stock Exchange as AFN. InvestorsHub.Com
operates both Investors Hub and Silicon Investor, according to its
website. ADVFN, according to its annual report, receives over
10 million dollars in revenues per year. Matthew Brown is not
on the parent company's board of directors or a part of their
executive management. He is listed as the Lead Site
Administrator for Investors Hub and has posted 24,285 messages on
the board, according to the website.