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by Mike Caswell

Matthew Brown, jailed operator of the Investors Hub website, has lost his bid to overturn a $4.78-million criminal penalty for a market manipulation scheme he aided. (All figures are in U.S. dollars.) Delaware Judge Sue Robinson, in an order handed down on Thursday, July 21, dismissed a motion by Mr. Brown to reduce his fine to the amount he actually made, which he calculated at $117,000.

The decision comes as Mr. Brown, 29, is serving a four-year jail sentence for the scheme. Prosecutors claimed that he and others manipulated stocks with prearranged trades and posts on Investors Hub. One of the companies included in the investigation was an Ontario-based pink sheets listing, Playstar Corp. Mr. Brown pleaded guilty to the charges in February, 2010, and the judge sentenced him to four years in jail and entered a $4.78-million forfeiture order.

Before he went to jail, Mr. Brown filed a motion in which he complained that the amount of his fine was excessive. As he understood it, by entering a guilty plea he was only agreeing to forfeit his personal gains from the scheme. He did not know that he would receive a "financial death sentence," he claimed.

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