The US Securities and Exchange Commission has brought penny stock fraud charges against Diana P. Lovera, the ex-COO of Oxford City Football Club, Inc. Lovera faced criminal charges in a parallel case and she has already pleaded guilty to conspiracy to commit mail fraud and wire fraud.
According to the SEC’s Complaint, from about 7/2013 to 7/2015, Lovera and others at the penny stock company used a boiler room and exercised pressure tactics to raise about $6.6M from over 150 investors. They sold millions of unregistered Oxford City stock shares. Many of the investors involved were unaccredited.
The regulator is accusing Lovera of making misstatements about Oxford City’s assets, potential for profit, business plan, and management composition. She also allegedly falsely told potential investors that they could “lock in” a reduced share price by using Oxford City’s voice verification “system.” She touted the system as having the ability to link the personal information of investors to an SEC filing.
The Commission contends, however, that there was no such verification system and that the ex-COO and others pretended that one existed by pressing buttons on a phone key pad.
Lovera, who settled the SEC’s fraud charges, has agreed to a penny stock bar and an officer-and-director bar. She must pay disgorgement of over $81K plus interest. The payment, however, will be deemed met by the restitution order included in the criminal case against her.
Lovera is currently serving a 20-month prison term, and, along with other defendants in the penny stock scam, she is responsible for paying investors about $6.31M in restitution.
Penny Stock Fraud
Penny stocks are stocks that trade at under $5/share and they have a small market cap. Penny stocks are allowed to trade outside big stock exchanges and they are frequently sold and purchased via over-the-counter exchanges and pink sheets—although penny stocks of larger companies are also traded on major exchanges.
Penny stocks tend to be less liquid than bigger stocks and they can be risky investments. Penny stocks are not for all investors. They are typically more suitable for those who are able to handle a certain degree of risk of loss.
Unfortunately, penny stock fraud is popular among those seeking to bilk investors who want to make a fast profit. At Shepherd Smith Edwards and Kantas, LTD LLP, our penny stock fraud lawyers represent investors in their fight to recoup their losses. Contact us today.
The SEC Complaint (PDF)