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by Mike Caswell

The U.S. Securities and Exchange Commission has filed a motion seeking $50.3-million in penalties for Joshua Lankford, a fugitive stock broker from Dallas. (All figures are in U.S. dollars.) The amount represents disgorgement of profits for three pump-and-dumps that occurred in 2005, including one that exploited the devastation caused by hurricane Katrina. The penalty, should the SEC win it, would be a decision by default as Mr. Lankford has not responded to the case.

Mr. Lankford would be the second promoter fined for the scheme, the first being former Canadian broker Dean Sheptycki. On March 11, 2011, the SEC secured a $98.7-million default judgment against Mr. Sheptycki, who also had not answered the case. The regulator claimed that he transmitted misleading faxes that aided the scheme.

The charges the men faced stemmed from three promotions, including the 2005 pump-and-dump of National Storm Management Inc. The men held the company out as a storm reconstruction outfit in the wake of hurricane Katrina, the storm that devastated New Orleans in 2005. As Mr. Sheptycki sent out faxes promoting the stock, Mr. Lankford and others carried out a series of manipulative trades through nominee accounts, the SEC said.

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