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by Mike Caswell

The U.S. Securities and Exchange Commission has filed a motion seeking $2.87-million in penalties against Vancouver promoter Joseph Fernando for two pump-and-dumps from 2005. (All figures are in U.S. dollars.) The regulator says he has been ignoring a civil suit it launched against him in 2009 over the promotions.

The SEC claimed that Mr. Fernando and others participated in a scheme to promote two OTC Bulletin Board stocks with paid tout sheets and spam. His role in the promotions included paying for favourable coverage in three newsletters, one of which predicted a $100 price for one of the stocks. During the promotion, he and the others sold $3.5-million worth of stock, according to the SEC.

Mr. Fernando's penalty, should the judge approve it, would be the largest in the case by far. The regulator previously settled out of court with the other defendants, with most of them accepting fines of $100,000 or less. One exception was Colorado promoter Scott Gelbard, who agreed to pay $350,000 and to serve a permanent penny stock ban. He and the others did not admit to any wrongdoing.

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