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by Mike Caswell

New York Judge William Pauley has imposed a $38.5-million sanction on Vancouver-linked Panamanian brokerage Verdmont Capital SA for helping multiple pump-and-dumps. (All figures are in U.S. dollars.) The judge entered the penalty on Friday, April 7, to end a civil case that the U.S. Securities and Exchange Commission initiated about two years ago. In addition to the substantial fine, the judge permanently barred Verdmont from penny stocks and from committing future violations.

The penalties come as part of a case in which the SEC cited Verdmont and several other offshore brokerages for their roles in four questionable promotions from 2013. The SEC said that the brokerages sold $75-million worth of shares while aggressive campaigns were under way to tout the stocks as active oil and gas or mining issuers. Of the companies, three had links to Surrey, B.C., and the other had a Montreal man as its president.

The sanctions are largely symbolic, as Verdmont is no longer in business. The firm stopped operating after the SEC's allegations became public. A receiver that was handling Verdmont's affairs defended the case for a time, but the firm eventually ran out of money to pay the lawyer. Verdmont's only remaining asset is a $239,000 account that the SEC had frozen at the outset of the case.

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