Florida Stock Broker Fraud Attorneys Look After Your Best Interests!

Florida stock broker fraud attorneys well understand the underpinnings of the 2012 case of the U.S. Securities and Exchange Commission(SEC) versus First Resource Group, LLC, in which company principal David H. Stern was “charged with 3 counts of fraud.”  The crime of fraud, in general, consists of deliberate misrepresentations–or omissions–of facts in order to profit, often at the expense of others.
In this case–Mr. Stern, of Florida, set himself up in 2008 as a stockbroker when, in reality, his company had never been “registered with the SEC.” He sold stocks using “instruments of interstate commerce and the U.S. mail to knowingly and recklessly employ devices, schemes, or artifices to defraud investors.”  David Stern’s “devices and schemes” played out as follows:
Signing a contract with 2 companies to “solicit investors” for their stock, Stern sought to aid TrinityCare Senior Living, Inc., which built and managed senior-care housing and Cytta Corp., which composed medical data software. He was given 150,000 shares of TrinityCare and 200,000 shares of Cytta for his trouble.
These “penny stocks” (at its highest, Trinity was worth about $1.95 a share) Stern pitched by employing a telemarketing company to cold call an entire list of “registered stockbrokers.” The telemarketers proclaimed–in Stern’s words–that “TrinityCare would appreciate by $5 or $6 in 6 months to a year,” and that it had gotten financing from the U.S. Department of Housing and Urban Develop to build more senior housing. These, however, were untruths. Telemarketers also asserted, at Stern’s bidding, that Cytta’s sales would reach $500 million by 2014. Hidden was the fact that Cytta had lost $70,000 in 2008.
At the same time that Stern was paying others to tout these “penny stocks,” he was selling his shares “for personal gain,” and without telling the stockbrokers who were investing his nearly worthless businesses. This fraudulent practice is called “scalping.”
Stern gained about $169,000 in this “stock manipulation” scheme. But, as he “lost control of the process,” TrinityCare and Cytta stock quickly sank in value, and the investors lost everything.
If you’ve been swindled in a “penny stock” scam such as this one, please contact us. We Florida stock broker fraud attorneys will work diligently to help you recover your investment losses.  Mr. Stern was forced, by the Court, to give up his “ill-gotten gains” to repay those he harmed. And, he was ordered to never sell “penny” securities again.  There is justice.  We can definitely help!