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by Mike Caswell

The U.S. Securities and Exchange Commission has won a $2.75-million penalty against Stephen Wheatley, one of the men charged alongside Kelowna's Shane Whittle for the Jammin' Java Corp. pump-and-dump. (All figures are in U.S. dollars.) The regulator claimed that Mr. Wheatley, a 52-year-old U.K. citizen, controlled a private company that was a heavy seller during the scheme. The SEC said that the selling took place amidst misleading and fraudulent on-line reports.

Mr. Wheatley's fine is contained in a judgment entered on Wednesday, July 6, in federal court in California. In addition to the $2.75-million fine, the SEC has permanently banned him from penny stocks and from committing future violations. The sanctions represent a negotiated settlement, in which Mr. Wheatley did not admit any wrongdoing. His fine comprises disgorgement of $2.36-million in gains plus interest.

The SEC claimed that Mr. Wheatley was part of a scheme to boost Jammin' Java to a $6.35 high in May, 2011. The company touted coffee products that used the name of the late singer Bob Marley. As the stock went up, entities controlled by Mr. Wheatley and others sold 45 million shares, according to the SEC. In all, the scheme resulted in $78-million in proceeds, the SEC said.

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