NY Court issues final judgment in SEC case against Beaufort Securities
The regulator has obtained final judgment in a securities fraud case against the UK-based broker-dealer.
The New York Eastern District Court has issued a final judgment in a case against Beaufort Securities Ltd. The proceedings were launched by the United States Securities and Exchange Commission (SEC) in March 2018.
In a document made available to FinanceFeeds on July 25, 2019, the Court orders that the defendant is permanently restrained and enjoined from violating, directly or indirectly Section 10(b) of the Securities Exchange Act of 1934 (the “ExchangeAct”) [15 U.S.C. §78j(b)] and Rule 10b-5 promulgated thereunder [17 C.F.R. § 240.10b-5], by using any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securities exchange, in connection with the purchase or sale of any security to employ any device, scheme, or artifice to defraud.
Beaufort Securities Ltd. has entered a general appearance and has consented to the Court’s jurisdiction over it. The defendant consented to entry of the final judgment without admitting or denying the allegations of the Complaint (except as to jurisdiction) and waived findings of fact and conclusions of law, and waived any right to appeal from the Final Judgment.
Further, the defendant is permanently barred from participating in any offering of penny stock, including engaging in activities with a broker, dealer, or issuer for the purposes of purchase or sale of penny stock.
On March 2, 2018, the Securities and Exchange Commission announced securities fraud charges against Beaufort Securities and its investment manager in connection with manipulative trading in the securities of HD View 360 Inc., a U.S.-based microcap issuer.
The SEC alleged that Beaufort Securities Ltd. and Peter Kyriacou, an investment manager at Beaufort, manipulated the market for HD View’s common stock. The scheme involved an undercover FBI agent who described his business as manipulating U.S. stocks through pump-and-dump schemes. Kyriacou and the agent discussed depositing large blocks of microcap stock in Beaufort accounts, driving up the price of the stock through promotions, manipulating the stock’s price and volume through matched trades, and then selling the shares for a large profit.
The SEC’s complaint against Beaufort and Kyriacou alleged that they:
- opened brokerage accounts for the undercover agent in the names of nominees in order to conceal his identity and his connection to the anticipated trading activity in the accounts;
- suggested that the undercover agent could create the false appearance that HD View’s stock was liquid in advance of a pump-and-dump by “gam[ing] the market” through matched trades;
- executed multiple purchase orders of HD View shares with the understanding that Beaufort’s client; had arranged for an associate to simultaneously offer an equivalent number of shares at the same price.
