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by Mike Caswell

Prosecutors in California have indicted New Jersey penny stock lawyer Gregg Jaclin, citing him for a shell factory scheme he and another man ran over a period of several years. According to prosecutors, the men created 10 shell companies, eight of which they sold as vehicles ripe for market manipulations. The listings that arose from the scheme included one that became Broadcast Live Digital Corp., a Toronto-area company.

The allegations against Mr. Jaclin are contained in an indictment filed in the Northern District of California on May 13, 2017. The scheme, as described by prosecutors, began in March, 2008, or earlier. At the time Mr. Jaclin was a lawyer in New Jersey who specialized in penny stocks. His practice included handling the steps involved in taking a company public, from incorporation to obtaining clearance to trade.

Over a period of five years, he and a co-accused created the 10 shells at issue, prosecutors claim. The shells each had nominee officers who, on paper, served as the majority shareholders and sole directors. According to the indictment, the nominees exerted no control over the companies. They were paid by and took all their direction from Mr. Jaclin's co-accused, prosecutors claim. Mr. Jaclin did not recruit the nominee officers, but he was aware of their roles, the indictment states.

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