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by Mike Caswell

The U.S. Securities and Exchange Commission has won $94.3-million in penalties against Joshua Lankford, a fugitive stock broker from Dallas, for his role in three pump-and-dumps from 2005. (All figures are in U.S. dollars.) The fine is contained in a default judgment handed down on Wednesday, July 27, that also permanently bans Mr. Lankford from penny stocks.

Mr. Lankford is the second promoter to receive a substantial fine by default for the scheme. The first was former Canadian broker Dean Sheptycki, who the judge ordered to pay $98.7-million. Like Mr. Lankford, he did not answer the SEC case and is a fugitive in the parallel criminal prosecution.

The charges the men face stem from three promotions, including the 2005 pump-and-dump of a pink sheets listing called National Storm Management Group 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. According to the SEC, Mr. Sheptycki sent out blast faxes promoting the stock while Mr. Lankford and others carried out a series of manipulative trades through nominee accounts. The men dumped millions of shares, making $43.9-million in total, the SEC says.

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