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by Mike Caswell

The U.S. Securities and Exchange Commission has secured a permanent penny stock ban against New York resident Glenn Grossman, one of the promoters in the Guyana Gold Corp. market manipulation. Mr. Grossman agreed to the ban to settle civil charges that stemmed from his role in a scheme to bribe brokers to buy Guyana Gold using discretionary accounts. The SEC claimed that he and others, including now-jailed Vancouver promoter John Zanic, offered a 30-per-cent kickback to the brokers' representative, who it turned out was an undercover FBI agent.

Mr. Grossman settled the charges out of court, without admitting any wrongdoing. In addition to the permanent ban, he agreed to an injunction barring future violations of the U.S. Securities Act. The penalties, which are contained in a proposed judgment filed in New York on Monday, Nov. 21, will become effective as soon as the judge issues a final order.

The ban comes three months after a New York judge sentenced Mr. Zanic, 51, to one year in jail in a parallel criminal case. Prosecutors claimed that he paid over $100,000 to the FBI agent, expecting that the agent would have eventually have corrupt brokers buy up to $3-million worth of Guyana Gold shares. (All figures are in U.S. dollars. ) Instead the FBI arrested Mr. Zanic in Las Vegas, and he later pleaded guilty to one count of conspiracy to commit securities fraud. He reported to jail on Oct. 5, 2011, and is serving his sentence at Federal Correctional Institution Sandstone, a low-security prison in Minnesota.

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