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by Mike Caswell

Vancouver's Gordon Brent Pierce has lost his appeal of the substantial penalty he received from the U.S. Securities and Exchange Commission for the Lexington Resources Inc. promotion. The U.S. Court of Appeals has upheld a ruling that imposed $11.45-million in sanctions on him in connection with the scheme. (All figures are in U.S. dollars.) The SEC had determined that he controlled stock sold in a 2004 spam campaign through a bank in Liechtenstein.

The loss is contained a ruling the appeal court released on Friday, May 22. In finding against Mr. Pierce, three judges agreed that he fraudulently concealed his control over shares of Lexington from SEC investigators. Those shares were in the name of two entities called Newport Capital Corp. and Jenirob Ltd. In sworn testimony provided to investigators, Mr. Pierce denied having any control over the Jenirob account, but that turned out to be untrue, the ruling states.

The appeal loss comes almost four years after the SEC imposed the penalties on Mr. Pierce. In an administrative decision dated July 27, 2011, the regulator found that he sold 1.6 million shares of Lexington as he actively promoted the company. The stock went to $7.50 from $3 during the promotion, on daily volume as high as one million shares.

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